Tips for Choosing the Best Hong Kong Credit Card for Your Lifestyle
The use of credit cards in Hong Kong is on the rise.
According to an article published on the website of Payments Industry Intelligence, this is the leading payment tool that consumers in this region use. It is believed that this trend will continue to rise until 2019.
The volume of credit card transaction in Hong Kong is expected to rise to 547.3 million in 2019 – a far cry from 483.1 million in 2015.
The article revealed that the growth in the use of credit cards in Hong Kong can be attributed to the security and the preferred lifestyle of consumers.
After all, use credit cards can be quite convenient. With the various shopping opportunities in this region, it is troublesome to carry cash around. It is also not safer. You have to understand that when you lose cash, you lose it forever. When you lose your credit card, you can call the issuer and ask them to freeze your account so no one can use it.
These factors make it logical for consumers to prefer credit cards as their primary payment tool.
What are the different types of Hong Kong credit cards
There are various credit card types available in this region. Choosing the right card will allow you to enjoy perks and rewards depending on how you use it.
Credit cards vary depending on the financial institution that issues it. This is why you need to consider the different interest rates, payment terms, rewards, fees, and other charges before you decide on the credit card that you will use.
To help categorize them, here are 4 different types of credit cards that you can use in Hong Kong:
- Local currency credit cards.
This is the most generic credit card that you can get in Hong Kong. It allows you to pay in the local currency. These type of cards are further categorized based on their economic bracket. The bigger the income, the higher the credit limit. Ideally, this credit card is used for local transactions.
But there are cards that you can use for foreign purchases – e.g. online purchases in a different currency. While this is allowed, you will be required to pay a foreign transaction fee that is equivalent to 1% to 2% of the transacted amount. This type of card allows supplementary cards – for spouses or children so they can use it when necessary.
- Foreign currency credit cards.
This is the same as the local currency cards but you are allowed to use it for foreign transactions without incurring additional fees. The currencies that will not incur conversion fees are specified – so make sure you ask for a list of qualified currencies from the credit card issuer (e.g. HK Dollar and Renminbi).
Since Hong Kong is a global market, this type of credit card is gaining in popularity among local consumers. Not only that, it makes travelling more convenient for cardholders.
- Affinity credit cards.
These type of cards is a partnership between a financial institution and a merchant or non-profit organization. For instance, American Express cards in Hong Kong offer
affinity cards that partner with various professional organizations like the Hong Kong Dental Association, CPA Australia Hong Kong, etc.
affinity cards that partner with various professional organizations like the Hong Kong Dental Association, CPA Australia Hong Kong, etc.
You may want to look into organizations that you know will complement your purchasing behaviour so you can benefit from these partnerships. Apart from rewards, you can also use these globally – wherever the organization is also active.
- Store credit cards.
Finally, you have the private labelled credit cards. These are credit cards offered by specific establishments and merchants that offer rewards for loyal clients. It is common for big retail chains or department stores in Hong Kong. Obviously, the use is restricted – but if you always shop in that establishment anyway, it may be worth your while.
How to choose the right credit card
In choosing a credit card, it is important to consider your lifestyle. The way you spend will determine the type of card that will give you the most value.
If you choose correctly, you can even end up earning from your purchases!
Here are helpful questions that will allow you to make a wise choice:
- How will I use the credit card?
If your purchases are limited to local transactions, a local currency credit card would suffice. But if your work forces you to travel or you personally love travelling, a foreign currency credit card is a better option for you.
- What are the interest rates, annual fees, and various charges?
Some cardholders focus on the interest rate – which is a wrong move. You have to consider the other fees too. The card may offer a low-interest rate but if they charge a high annual fee, you will spend unnecessarily on them.
- What rewards and perks do the credit card offer?
Again, this will depend on your buying behaviour. If there is a rewards program, make sure you can maximize that. Sometimes, there are credit cards that offer travel points that you can use when you go on a holiday.
If the store credit card offer discounts and you intend to shop there all the time, you can rack up rewards just by buying things that you usually buy. It is a win-win situation for you.
The bottom line is, choose credit cards that complement your lifestyle preferences. That way, you can get freebies and rewards without changing anything about your purchases.
