Get more out of your cards

While credit cards have long been a preferred option for payments for many people, debit cards and even prepaid cards are gaining ground as people seek control and as the features on those other cards get better. Rather than just automatically choosing credit cards, it may be worth your while to look again at what plastic will actually work best for you.

GROWTH IN CARDS

Even though more than half of consumer transactions here are made with cash, according to advisory group KPMG, transactions on cards are growing rapidly. Indeed, data from the Monetary Authority of Singapore shows that consumers here hold more than 9.1 million credit cards and spent more than S$49 billion using them last year.

The number of prepaid cards is even higher, with payment solutions company Nets having issued more than 10.7 million FlashPay cards and payment network EZ-Link having issued more than 17 million. Even though not all of them may still be in use, Nets reported that its customers spent S$24 billion on their cards last year.

While many consumers think first about credit when they hear the word "card", there are actually three types of cards. Credit cards enable consumers to make purchases and buy on credit, so they can choose to pay all or just part of the balance they owe each month.

Debit cardholders use the money in their bank account, while prepaid cardholders such as FlashPay or EZ-Link customers use money that they load onto the card in advance.

The stored-value cards can be used online and offline to buy almost anything. Nets cards are accepted at 97,000 points nationwide, for instance, while EZ-Link can be used at more than 30,000 points across the island.

And usage of debit cards is continuing to grow, with the recently-released 2016 Visa Consumer Payment Attitudes survey showing that the percentage of consumers saying they prefer to use debit cards doubled from 2015 to 2016.

Consumers' desire for more control over their finances, the government's push to reduce consumer debt and the cost of credit cards that currently incur interest rates up to 28 per cent are among the key reasons for the shift to debit or prepaid cards.

BE REWARDED AS YOU SPEND

Part of the reason for the increase in debit and prepaid card usage is also that those cards now offer better benefits than they did in the past. While only credit cards used to give reward points or discounts, some debit and prepaid cards now offer similar benefits.

The DBS Visa debit card gives 5 per cent cash back for contactless payments, for instance, while the Krisflyer UOB Debit Card offers at least 0.4 air miles per dollar of spending and up to 5.4 miles per dollar if your balance is high enough.

Just like with credit cards, some debit cardholders also receive discounts at merchants.

Not to be outdone, EZ-Link and Nets have launched new programmes too. EZ-Link cardholders can get points for riding the public transport as well as for other spending, while the Nets Savers programme gives rewards or deals to cardholders who use its app.

Even though debit and prepaid cards do offer rewards, credit cards admittedly offer more. The Citi Cashback Credit Card gives 8 per cent cashback on dining and groceries, for instance, while the UOB One Card gives 5 per cent back if you spend at least S$2,000 per month.

GETTING THE BEST DEAL

The range of benefits has become so vast that choosing among these and other cards to get the right one, and then pulling the right card out to get the highest discount, has become a dizzying dilemma. Fortunately, several start-ups offer apps that help with selecting a card or finding deals.

Which card is best really depends on where you spend the most and whether you want air miles, cashback or something else.

A variety of websites can help you select the right card based on your habits and preferences.

SingSaver offers a list of credit cards with the highest cashback or rewards levels, for instance, while GoBear offers advice based on preferences you input online.

EnjoyCompare similarly makes it easy by providing tabs to select the best credit card for groceries, dining, petrol or other benefits. If you want a debit card, on the other hand, Google searches for debit cards with discounts and rewards may be a better option.

Once you have a card - or several, since the average credit cardholder here has about four cards - the next step is figuring out where to use it and which one to use for the best deals.

Some banks have apps that make it easier to find deals for their own cards. OCBC WowDeals, for instance, shows deals at nearby merchants and also sends out mobile coupons.

An app that looks for the best deal on more than one bank's cards may be even better. The GETdeals app does exactly that, for instance, with offers and discounts from multiple banks on your mobile phone.

SPEND MORE, SAVE MORE

With the Great Singapore Sale under way and more offers coming out all the time, using cards for payments brings benefits regardless of whether you choose credit, debit or even prepaid.

With plenty of advice available online, it is easier than ever to choose how best to take advantage of all those great opportunities.