Do I require a UOB One credit card? I am given a UOB One debit card when I signed up for UOB Uniplus account for the purpose of financing my housing loan?

Hi Lissy,

I'm not sure if you're mistaken. If I'm not wrong, the UOB Uniplus account does not award bonus interest for meeting the $500 monthly spending - it is the UOB One account that does. For the UOB One account, using the UOB One debit card will suffice. If you meet the monthly spending of $500 and have salary crediting of $2k, you will be eligible for even more bonus interest - so you definitely should credit your salary into the UOB One account, if you are intending to make use of it.

As for how people use credit cards, I'm assuming that you're asking how credit cards work. When you sign up and get approved for a credit card, you will have a credit limit. This refers to how much you can spend on your credit card every month. When you spend with your credit card, no money leaves your bank account - everything is paid "on credit", which means the bank is paying for it first based on the trust that you will pay them back whatever you have spent. The bank tracks all this spending and issues you a credit statement every month, detailing all the transactions and their amounts. You will then be required to make a payment to pay off the statement amount. Usually, you will have about 1 month to make this payment. It is extremely important that you make the payment in full and on time every month because if you don't, the balance will incur interest charges at rates of ~25%, causing you to spend extra money for nothing.

Before you decide which credit card to get and from which bank, you should first decide what it is you want to earn - cashback, miles, or rewards points. Then, look at your past few months' expenses to determine which categories you spend the most on and try to find a card that will reward you the most for that category. Since your UOB One debit card will meet the bonus interest criteria for the UOB One account, you don't need to get a UOB credit card, although you can. There's a lot more that can be said about choosing a credit card, but these are the basics to consider.

Hope this helps!

Regards,

thefrugalstudent