Cashback (or cash rebate) credit cards let card members save money on their spending. They usually work in two ways:

1. You spend money on the card first. At the end of the month, depending on the total amount you spend and the percentage of cashback the card offers, cashback will be credited into your card account. It will then be reflected in your next credit card bill.

2. You get the cashback instantly. That means the amount of cashback will be deducted on the spot when you pay for something with the card. It works just like instant discount.

Almost every cashback card comes with a monthly spending requirement. That means you need to spend a certain amount of money to qualify for the cashback. Usually, there is also a monthly earning cap, which is the maximum cashback you can earn every month.

Before I talk about the benefits of using cashback cards, there are two things I have to mention here. First, don’t overuse a cashback card with the thought that you will need to hit a spending target to get cashback. You’ll end up wasting money that way.

Secondly, don’t let the word “earn cashback” play your mind. It’s a fancy word for banks, credit card companies, merchandisers and even financial product review websites to encourage you to spend more. Banks reward you with cashback for spending your own money. They use “earn” because it sounds like there’s an action to it.

Having said that, cashback cards do help you save money – that is when you use them right. If you need to spend that money anyway, why not get something back in the process?

There are many cashback credit cards in Singapore. Almost every major bank has one or a few. I won’t list all of them here, because even if you read all of them, you’ll probably be more confused about which one is better.

In my opinion, 3 cards are the real strong contenders, namely OCBC 365 Credit Card, The American Express True Cashback Card and UOB One Card. Wondering which one is the best for you? Let’s take a look at their benefits. (For the sake of comparison, I will focus on the cashback feature of these cards. Other benefits that help you save money will be briefly discussed here too.)

OCBC 365 Credit Card

OCBC Bank 

• 6% cashback on weekend dining in Singapore.

• 3% cashback on dining overseas.

• 3% cashback on all online spending, including online shopping, online ticketing and other things. But don’t dream that you will enjoy this benefit when you pay your bills online, such as internet banking transactions, government and institution bills, utility bills and fines. Only purchases of goods and services constitute “online spending”.

• 3% cashback on all spending at local supermarkets.

• 3% on recurring telecommunication bills with SingTel, StarHub and M1. Remember you need to set up the payment to let the card pay your telecommunication bills every month, so that you can enjoy this benefit. If you just pay a random bill once in a while, no matter how big the bill is, you won’t get 3% cashback.

• 0.3% cashback on all other spending that’s not mentioned above.

Additional benefits

• Up to 18.3% discount on petrol purchases at Caltex and Esso, as well as 5% cashback at all other petrol service stations.

• S$800,000 complimentary travel insurance. If you purchase your air tickets with this card, you’ll be automatically covered by S$800,000 worth of Personal Accident Insurance and up to S$400 coverage for baggage lost more than 48 hours. This is a great benefit and will save you money by skipping the purchase of additional travel insurance. Personally, I think it also saves time by avoiding browsing through different travel insurance policies for every trip.

• If you have a Child Development Account with OCBC, you can also get 3% savings on medical bills transacted over the counter, including dental, clinics, cord blood banking and hospitals.

Minimum spending requirement: S$600 per month. In order for you to enjoy all the cashback, you have to hit the minimum spending target of S$600 per calendar month (based on posted transactions). If you do not meet that requirement, regardless of the amount you spend in any category, you’ll only get 0.3% cashback. For example, if you spend S$599 in June, even though that $599 is all spent on dining, you’ll only receive S$1.797 cashback (S$599 x 0.3%) in July.

Earning cap: S$80 per month. You don’t get non-stop cashback every month. When the cashback hits S$80 (the total amount of cashback accumulated from all different spending categories) in a calendar month, this card will stop giving you cashback. For example, if you spend S$1,333.33 on weekend dining in June, you will already receive S$80 cashback (S$1,333.33 x 6%) in July. Even if you spend another one cent on dining, shopping, travel or anything else in June, you won’t get any more cashback in July.

The main feature of this card is that it gives you cashback in a lot of different categories: Dining, online shopping, grocery shopping, telco bills, petrol and travel. If you are someone whose spending pattern is very diversified, this will suit you well. But the downside is that you probably need an eidetic memory to fully utilize all the benefits. Look at all the numbers listed above: 0.3%, 3%, 6%, 18.3%… Do you have time for this in your life?

The American Express True Cashback Card

American Express

• 3% cashback on all spending for the first 6 months, starting from the date that you receive the card. It doesn’t matter what you spend on, whether it is coffee, meals, shopping, movies, petrol or travel, as long as you charge the expenses to this card, you get 3% cashback. However, there is an earning cap. The 3% cashback is only applicable to the S$5,000 you spend during the first 6 months, which means the maximum cashback you can get is S$150 (S$5,000 x 3%). Nevertheless, it’s quite a sum already – provided that you really spend S$5,000 in 6 months.

• 1.5% cashback on all spending after the first 6 months. All types of purchases of goods and services count, whether it’s online, offline, retail or non-retail. You may think 1.5% doesn’t sound a lot. But hey, you don’t even need to think for a second whether you will get any savings on your spending.

No minimum spending requirement and no earning cap. This is the greatest part of this card. You don’t have to worry whether you will hit the spending target or if you have already maximized the cashback benefit each month. This is truly “The more you spend, the more you save”. (Be careful, this is not meant to be interpreted as an encouragement for you to spend!)

The main feature of this card is that it is very straightforward. It works in the simplest way for a cashback card: for every dollar you spend, you get 1.5 cents back; and no matter how much you spend every month, you will always get 1.5% cashback. There are no strings attached and you don’t have to think about anything else.

UOB One Card

UOB

Though UOB One Card touts as “Singapore’s most generous rebate card”, the way it rewards card members is also the most complicated. The cashback of this card is categorized into 3 different tiers, a system that I doubt anyone will enjoy spending time remembering.

• Tier 1: In the same quarter, if your spending is between S$500 and S$1,000 in each month, and you use the card at least once every month, you will get S$50 cashback in this quarter. That means you get about S$16.67 cashback on a monthly basis.

• Tier 2: In the same quarter, if your spending is between S$1,000 and S$2,000 in each month, and you use the card at least 3 times every month, you will get S$100 cashback in this quarter. That means you get about S$33.33 cashback on a monthly basis.

• Tier 3: In the same quarter, if your spending is at least S$2,000 in each month, and you use the card at least 3 times every month, you will get S$300 cashback in this quarter. That means you get about S$100 cashback on a monthly basis.

Other benefits

• On top of the cashback, you can also get 10% SMART$ Rebates at over 900 merchants in Singapore. SMART$ is a separate rewards program from UOB and it is offered on top of the cashback rewards. Popular participating merchants include Guardian, BreadTalk, The Coffee Bean & Tea Leaf, EpiCentre, Cold Storage, Giant, Cathay Cineplexes, Metro and a long list of others. I personally use this benefit a lot at BreadTalk and The Coffee Bean & Tea Leaf, because there are UOB payWave readers right at the cashier counters, which remind me of this benefit.

• Up to 22.8% savings at Caltex and 24% savings at SPC.

The main feature of this card is that it can be quite rewarding when you fulfill certain requirements. In the case of tier 3 cashback program, the card is indeed very generous as the cashback amounts to 5% (S$100 cashback / S$2,000 spending).

The drawback is that the requirements are set out in a complex way: the total spending is calculated in a quarterly basis, which makes it difficult to track your expenses. Do you always keep your bills and statements in the past 3 months? I know I’m not that organized and I don’t want to spend time doing it. On top of the minimum spending requirement, you also need to track the usage of the card, because for you to qualify for the cashback, you need to make at least 3 transactions in each month of the same quarter. (It already tires me when I’m typing this.)

Conclusion

• If you are someone who spends money in a lot of different ways (especially when you dine out a lot), OCBC 365 Credit Card is your best choice.

• If you are someone who just want to save money whenever you can, The American Express True Cashback Card suits you better than any other card with its 1.5%-cashback-on-all-spending benefit.

• If you are a big spender and your monthly expenses exceed S$1,000 or even S$2,000, use UOB One Card as you’ll get handsomely rewarded.

• If you have multiple cards, look at your lifestyle and see which card offers you more cashback in the category you spend the biggest buck. Try to concentrate on that one card first until you meet the spending requirement, and then switch to another card to fully utilize all the cashback cards you have.