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4 Things You May Not Know About Eligibility For Credit Cards In Singapore

This article was originally on GET.com at: 4 Things You May Not Know About Eligibility For Credit Cards In Singapore

As shocking as this might sound, clever use of credit cards can really help us save money. But if you are new to the world of credit cards, it is best that you consider these things before getting your first credit card. Being responsible and accountable is paramount to making sure that you don't rack up credit card debts that you cannot possibly handle.

While we do know that there is an overwhelming number of different credit cards in the market, and that some have a minimum annual income of $30,000 whereas others are reserved for high income earners, that isn't all there is to credit card eligibility in Singapore. Below, we at GET.com share some interesting insights regarding credit card eligibility that you may not be aware of.

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4 Things You May Not Know About Eligibility For Credit Cards

1. The $30,000 Minimum Annual Income Requirement Isn't Set By The Bank

Instead, this figure is set by the Monetary Authority of Singapore (MAS) specifically for individuals below the age of 55-years-old. In any case, some banks do not let you apply for credit cards if you're above a certain age.

Considering that $30,000 is the minimum annual income you ought to be making if you want to get your hands on a regular credit card (i.e. one that doesn't have a teensy tiny credit limit), you need to be bringing home at least $2500 every month.

2. Your Credit Limit Is Highly Dependent On Your Income

While borrowing on credit doesn't sound that nice in reality, if you make it a point to pay your bills in full punctually every month, using credit cards smartly can be a great way for you to snag discounts and earn rewards no matter whether you're big on cash rebates or air miles.

For those who don't already know, your credit limit is limited to 4 times your monthly income. That is the maximum amount of credit that each financial institution or bank can extend to you no matter how many cards you may have with that particular financial institution. Put simply, if you make $4000 a month, your credit limit will be $16,000 no matter whether you have one credit card or 10 credit cards with the same bank.

But of course, the bank has the right to extend less credit to you depending on your credit reports and your credit history. Let's face it, banks are running businesses; they wouldn't want to risk dealing with bad debts if they have the power to minimise them in the first place.

3. Nobody Says You Can't Be Granted More Credit

All you have to do is apply for another credit card from a different financial institution. For instance, if you already have Citibank credit cards, shoot for an ANZ credit card or American Express credit card (or whichever you like). By the way, you may want to consider the cards from American Express because American Express has some of the most attractive credit cards in Singapore.

Just don't be overzealous and apply for too many credit cards! You know yourself best, so take charge of your finances and always keep a watchful eye on how much you are spending on credit.

4. There Is A Borrowing Limit For All Individuals

Even though you're incredibly savvy and you use different cards for different types of purchases to max out your savings, credit cards are a form of unsecured credit and according to MAS, there is an industry-wide borrowing restriction on the amount of unsecured credit that all banks and financial institutions can extend to you, a borrower.

At the moment, this limit is 24 times one's monthly salary. MAS intends to tighten it to 18 times one's monthly income from 1 June 2017. By June 2019, this limit will be narrowed down to 12 times your monthly income.

What do you think? Share your comments with us below!

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