Make the Most of Your Credit Card Rewards Programs in Hong Kong
Rewards credit card is a great way to save on your usual purchases. After all, the use of credit cards in Hong Kong is quite extensive. According to the data published on HKExNews.hk, the credit card circulation in this region increased to 19 million in 2015. It is believed that it will surge in 2016 and all the way through 2020. The increase, according to the data, is believed to be driven by the convenience of digital money and of course, the rewards and discounts offered by credit cards. From cash-back rewards to air miles, card holders are encouraged to own more than one card in order to benefit from all the discounts and rewards being offered.
However, you need to know what you are doing so you can maximize it. Although the use of cards in Hong Kong is quite prominent, a lot of people have no idea how to use the accumulated rewards on their credit card to their advantage. If you really want to enjoy the convenience of these cards, you have to understand how to use the rewards credit card to your financial advantage.
Two important considerations about credit card rewards
In order to maximize the rewards programme on your cards, you need to make the right choice first. To do that, you need to think about two important considerations.
Do not forget about the interest rate.
Sometimes, Hong Kong consumers are too focused on the rewards that they tend to ignore the interest rate. Unless you plan on paying your credit card balance completely at the end of each month, then you can pay no heed to the interest rate of your card. But if you know that there will be expensive purchases that will be carried over to the next billing cycle, you have to make sure the interest rate will work in your favour. It does not matter if the rewards credit card offers a combination of cash-back, on-line shopping, air miles, and on-line payment rewards. It will all be for nothing if you will end up paying a lot because of the high-interest rate. Take note of the other fees as well – like the annual fees. If you calculate them all, it will add up into a significant amount.
Make sure it compliments your lifestyle and spending behaviour
The second consideration is your lifestyle and spending behaviour. If you intend to travel a lot, choose a rewards credit card that will give you air miles for your expenses. If your form of entertainment is dining out with family and friends, you can choose a card that will specifically give you cash-back rewards for your restaurant expenses. HSBC Visa Signature Card offers a 3.60% cash-back reward for dining expenses.
Apart from your lifestyle, you should also look at your spending behaviour. If you love shopping on-line, there are credit cards that offer a specific rewards programme that caters to your preferences. Some cards like DBS Eminent Card offers a 6% cash-back reward. You can get up to HK$2,400 worth of cash rebates.
When you consider your lifestyle and spending behaviour, you are bound to choose a rewards credit card that will allow you to accumulate points and rewards without changing anything about your habits.
Tips to keep your credit spending under control while maximizing rewards
While the rewards may provide you with savings and discounts, you still have to make the right choices about your card. You have to be careful not to spend too much just to earn these rewards. These discounts, points, and rewards will be for nothing if you will end up with huge credit accounts.
According to a publication from the animated Chin Family, credit cards should be used wisely because it has a higher interest rate compared to other forms of debt. Using your card is not bad – you just have to find a balance so you can maximize your rewards while staying away from too much debt.
Here are some tips that you can follow to help you control your credit use while maximizing your rewards:
- Budget your use of credit. Make sure everything that you will spend on your rewards credit card is plotted in your budget plan. This is the only way that you can ensure that you will not overspend as you use it.
- Use your budgeted credit card as cash. This means you have to use it for everything! Just make sure you stick within the limits defined by your budget plan.
- See if you can pay your utilities through your cards. Since these expenses are usually included in your budget, you should be able to pay them off immediately.
- Pay off your balance in full once the billing statement comes in. This is the best way for you to avoid any interest rate and finance charges that can increase your balance. This should be easy because you have included in the budget all your expenses.
- Understand your rewards. Most of the time, rewards come with a limit. For instance, air miles will expire so make sure you are able to redeem your points before they do. Otherwise, you would have wasted all the points that you accumulated.
Follow these tips so you can really feel the benefits of using your rewards credit card. Remember that your rewards may be very attractive but it is not really worth putting yourself through huge amounts of debt.
She is a Singapore Management University 2nd year undergraduate specialising in Strategic Management. From Tampa, Florida, she possesses an International Baccalaureate diploma from C. Leon King High School, and previously held the position of Treasurer of the King High School Division of the French National Honour Society and the Science National Honour Society. Abigail is currently acting as President of the French Cultural Club for SMU International Connections, and as a Resident Advisor and Fire Warden for the SMU Residences at Prinsep.
Abigail is a Former Florida Science Olympiad Champion in chemical forensics and protein modelling, and former Health Occupation Student’s Association District Champion in clinical nursing.
In her free time, Abigail enjoys interacting and caring for animals. She has previously volunteered for the Humane Society of Tampa Bay as an Adoption Assistant.
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