I find it incredulous that after almost a year of writing personal finance posts, I haven’t really dedicated any single post on credit cards!
Well, there’s a good reason for this. There’s just way too many credit cards out there and designing the “best” strategy can be as difficult as say, rocket science (and I mean it).
Shopping at Taka? There’s the DBS Taka Card. Dropping by at Robinsons tomorrow? Please remember to bring the OCBC Robinsons Card out. Paying your M1 bills and it makes sense to sign up for the Citibank M1 Card. This process goes on and on before you realise that you have signed up for at least a dozen cards. Duh.
And carrying a bursting wallet just isn’t sexy. Contending with a flooded mailbox and sifting through many envelopes could prove to be more tiring than expected. Not to mention the many calls you have to make to waive those irritating annual fees even though you had barely used that credit card. And there’s one more, checking if the points you have painstakingly accumulated on those cards have expired. Urrgh…
Therefore, I catch myself dreaming:
If only there was this great, simple, non-complicated credit card that provides good cashback for most of my purchases…
Now, it appears that OCBC have turned this dream of mine into reality with their new OCBC 365 Credit Card.
Highlights of OCBC 365 Credit Card’s cashback benefits
6% on local weekend dining – In all honesty, I can’t understand the weekend crowds at most restaurants. Seriously, have you observed the queue at Sushi Tei on Saturdays at Vivo CIty? It’s absolute madness! With this offer, there’s a good chance the queue is going to get even longer and it’s probably prudent for me to shift weekend dinner time half an hour earlier to 530pm from now on. =p
3% on local weekday dining – We eat out pretty often on weekdays these days and it’s really difficult for us to chalk up $50 at Ding Tai Fung to qualify for the 2% Citibank DIvidend Card rebates so that’s where this card comes in.
3% on recurring telco bills – If you’re a customer of more than 1 of the telcos, this makes perfect sense for you to consolidate all of them under one card to enjoy a pretty generous 3% cashback.
3% on groceries – Admittedly, this isn’t as high as other cards lout there ike the Maybank Family & Friends. But 3% is pretty decent, especially you need this category’s spending to help chalk up a total spending of $600.
Caveats and Condtions
But before you rush out immediately to sign up for this card, here’s some caveats and condtions to take note of.
You need to spend a minimum of S$600 in a calendar month:
This is the catch which might cause the whole deal to collapse spectacularly in front of you. *shrug shoulders*
If you have a big family and dine out at restaurants more often than every other night, this is a non-issue. Reaching $600 is chicken feet. But if your spending behaviour is somewhat more conservative like the 15 HWW household, charging $600 to this card could prove to be no simple feat, especially if you’re an individual.
And that’s where the telco bills and grocery purchases comes in. I would have probably given this card a pass if not for them. We simply do not spend $600 a month dining out at restaurant and if we were to increase expenditure significantly in this area just to qualify for the cashback, we should start getting our brains checked.
Cashback amount is capped at $80 per calendar month – If you’re a high roller (then what are you doing reading this blog?!), and intend to charge more than $2,000 per month to this card, this could affect you. Charging $1333 of weekend dining would max out the benefits.
F & B outlets located within hotels are excluded from dining cashback – Pretty self-explanatory
OCBC 360 Account – The Ultimate Combo
As seen from above, once the $600 criteria is satisfied, the OCBC 365 credit card becomes an irresistable product to own. A minimum of 3% cashback (more likely closer to 4%) is to be expected.
And it becomes absolutely essential when you combine it with the OCBC 360 Account.
Here’s an illustration and some simple math (which I emphasize, is purely hypothetical at this stage) to explain the maximum returns from using the card together with the account:
Let’s say you have $50,000 in the OCBC 360 Account.
1. By charging $600 to the OCBC 365 Credit Card in July 14, you could get $24 (an estimated 4%) of cashback.
2. Since this also helps you to qualify for an additional 1% interest in your OCBC account, you’re essentially getting $40 of “cashback” for your expenditure ($500 of interest in a year/12)
3. Adding them together, it’s $64 of cash benefits, which translates to a ~10% discount on your spending.
Isn’t this awesome?
OCBC is really tempting me with their recent offerings. I am getting my phone and scissors ready. Maybe it’s time to close some accounts and cut up some credit cards. Unless the rest of the competition shakes up…
You can get more details regarding the card, its cashback benefits and the conditions here.
Additional Disclaimer: The calculations are hypothetical and this post is based on my understanding of the product thus far. As such, I am in no way responsible if you fail to get your cashback / interest / benefits. Furthermore, I am not writing this article because I am getting a fee from OCBC. In fact, I ain’t entirely sure they would like to have a customer like me. I am just getting impressed with them with what appears to be another great product. =p