Is there a downside to signing up for credit cards to get their sign-up rewards? Can i get the rewards and close account 1 or 2 years later? - Seedly
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Anonymous

Asked 2w ago

Is there a downside to signing up for credit cards to get their sign-up rewards? Can i get the rewards and close account 1 or 2 years later?

Take a look at these 2 cards.

1) Standard Chartered Unlimited Cashback Credit Card

2) Citi Rewards Card

As i have not signed up for a credit card before, would these 2 cards be worth getting simply for the sign-up rewards? I have no intention of using them for expenditures and actually have another card in mind (DBS Live Fresh Student Card) since that is more relevant to my spendings.

I am aware that of credit score but have quite a few years before that is important to me.

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There isn't really much of a downside for signing up for those credit cards in order to get the free gifts. Do note that even if you cancel immediately after receiving the free gifts, there is a waiting period of approximately 12 months before you are considered as a new-to-bank customer again.

You should also watch out for cards with mandatory annual fee payments, such as Amex KrisFlyer Ascend and most Visa Infinite cards. Most cards can get their annual fee waived pretty easily, and even if you can't, they typically let you cancel without needing to pay the fee.

I suggest that you take advantage of the sign-up promotions, and keep the card(s) that align best with your spending patterns and rewards goals (cashback/miles). The DBS Live Fresh Student card is rather restrictive with the $500 credit limit and does not enjoy some of the benefits that standard cards do.

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Question Poster

2w ago

Im just curious, how often do people take advantage of these sign up deals? If theyre in a similar situation as me, with little need for credit and with a reasonable time frame to spare, wouldnt this be very enticing? But i havent really come across people in the same age range (20s) mentioning much about such deals.
Nicholas Beh
Nicholas Beh

2w ago

I don't think people mention this often because most rather just keep the card and enjoy the benefits. It can be time consuming and not worth the effort to some. This behavior is known as churning, which is quite popular in the US but not so much in SG. You should note that applying for multiple credit cards will result in multiple enquiries to your credit report, causing a temporary decrease in your credit score. But as long as you pay your bills off on time, there should be no long-term negative effects.
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To add on you also risk annual fees which you may not be able to waive without any transactions. Increase chances of not paying fees if you forget and end up paying more.

Penny wise, pound foolish.

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Question Poster

2w ago

If i remember correctly, the cards mentioned have a 1 or 2 year free fees. What if i am sure that i'd remember to cancel them before reaching the payable year?
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Since you are planning to use the DBS Live Fresh Student Card, I am assuming you are a currently a student. Both credit cards require an annual income of $30,000 for Singaporeans/PR which may not be achievable for you at this stage.

Assuming the requirements for the card application are met, I would personally still not apply for the card just for the reward as the time could be put to better use.

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Question Poster

2w ago

Sorry i should have clarified. Im doing a postgrad so i am able to qualify for both cases.
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