Credit Cards

What Features Do Credit Cards Have? (Part 2)

Elizabeth Kwong

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We’ve come a long way from the days when credit cards rarely had more than one feature. These days, every bank and Financial Institution (FI) carries a range of credit cards with a mind-boggling range of perks, rewards and discounts, allowing consumers to curate the credit cards in their wallet according to their lifestyles.

For instance, those who travel frequently for business or pleasure can benefit from credit cards that offer air miles, discounts for making ticket and accommodation bookings online and free travel insurance.

Drivers can benefit from credit cards offering petrol discounts or perks like personal accident insurance or roadside assistance in case of accidents.

The message is clear—think about who you are as a person and the kind of lifestyle you lead, and then go forth and find credit cards that will reward you handsomely!

Here are some of the most popular features credit cards are offering these days:

 

Introductory and sign-up perks

Some credit cards that aren’t really all that special are still worth signing up for if they come with attractive introductory or sign-up perks.

Here are some of the most common perks:

  • 0% interest balance transfer: If you’re carrying a hefty balance on more than one credit card, consider signing up for a card that will allow you to transfer to it all your existing balances, and will offer you a period of 0% interest while you’re at it. These promotional periods usually last from 6 to 12 months. Just make sure you pay off the balance before the promotional period ends, or you’ll get slapped with their regular interest rate of over 30%.
  • Low interest rate: These cards work in the same way as the 0% interest balance transfer ones. They enable you to make big-ticket purchases at very low interest rates, although of course you should make sure you pay off your entire balance before the promotional period ends.

 

Rewards programmes

Credit cards with rewards programmes are a big hit with consumers. After all, who wouldn’t want to be rewarded for every cent they spend?

These credit cards enable you to accumulate points whenever you spend money. You can then use the points to redeem rewards such as shopping vouchers, electronics, travel vouchers and so on. Credit cards generally award 1 Mile per $8 spent or 1 CashDollar per HK$250 spent.

Rewards programmes don’t necessarily have to involve rewards points, though. Here are some of the many types of programmes available:

  • Rewards points: Typical rewards programmes give you points for every dollar spent with your card, as well as bonus points for using your card at certain shops or in certain spending categories. You then exchange your points for rewards in the bank or FI’s rewards catalogue.
  • Cashback: These are some of the easiest credit cards to use. You simply receive an amount of cashback whenever you spend money, which usually ranges from 0.4% to more than 10%. Do note that many banks and FIs set a cap on the amount of cashback you can claim each month or quarter.
  • Hotel or travel points: Credit cards offering hotel or travel points are often offered in partnership with a particular hotel brand. You accumulate points when you spend on this card, points which can then be used to book hotel stays, get upgrades or on other travel spending. You also often get bonus points or an accelerated rate of points accumulation when you spend at partner hotels.
  • Petrol points and rebates: All drivers need a card they use to pay for petrol at their most frequently-visited petrol station such as Shell or Esso. These cards usually give you cash rebates of up to HK$1 per liter at certain petrol stations.
  • Retail rewards: These cards are are usually partnerships between a certain retailer or department store brand and let you accumulate points when you spend at their partners’ stores. These cards are good for those who are loyal customers of a certain retailer.

As you can see, if you spend a lot in a certain category it’s worthwhile trying to find a card that will reward you for it. Also note that some cards can boast more than one of the above features.

Frequent flyer programmes

Anyone who travels often, whether for business or for fun, should absolutely sign up for a credit card that offers frequent flyer miles, or that’s linked to a frequent flyer programme.

These cards let you accumulate miles whenever you make a purchase, and often reward you more generously when you make travel-related bookings. Getting a co-branded frequent flyer card linked to your favourite airline (eg. Cathay Pacific) can let you earn bonus miles at a higher rate, or give you perks such as airport VIP lounge access.

Here are some of the most common iterations of frequent flyer credit cards.

  • General Asia Miles cards: Typically, airline miles credit cards enable you to earn Asia Miles or points that can later be converted to miles when you spend money. These miles can then be used to redeem free air tickets. As these cards are generally not affiliated to any one airline, you won’t earn bonus miles or points for flying with any particular airline.
  • Airline-specific miles: These credit cards are offered in partnership with a certain airline, such as Cathay Pacific’s Marco Polo Club. You often get rewarded at a more generous rate for purchasing tickets on the affiliated airline, and benefits such as VIP lounge access or even priority seating might be offered, too. This is a great option for loyal customers of a particular airline.

No matter what kind of credit card you’re signing up for, check the terms and conditions of the frequent flyer or other rewards programme so you know exactly how many miles or points you are entitled to each month and when these points or miles expire.

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