Financial Freedom SG

1. When you first get your credit card and you may be tempted to swipe it to the max and pay the minimum sum. In a year, you pay $5000 x 24% which is $1200 each year as fees to the bank.

2. You can get waiver for annual fees, late payment, interest. Only if you call in to beg/ demand. And your record is relatively spotless, you pay everything in full and don't forget to pay your credit card bills too often. Else don't bother calling.

3. If you are sinking under number 1, you can do worse if you have 5 cards with 5 different banks and pay $1200 x 5 = $6000 each year to the banks. You'd be the banks' favourite customer.

4. If you think no.3 is bad, it gets worse. You can apply for the credit lines, or their balance transfer promotions since these pay less interest to the bank. Oh, only 12% per annum! And you continue to spend like there's no tomorrow and apply for 5 credit lines with your 5 banks. 5000 x 12% x 5 banks = $3000. So it is $3000 on top of the $6000.

5. When you are in stage no.4, the banks introduce you to overlimit fines, late fees which they will not give you a waiver, annual fees that they also won't give a waiver. And interest? They'll want all the interest too. And when you try to swipe the darned cards, they all get rejected because you have reached the limit. You can the bank to plead to allow the purchase and you are introduced to the Authoriser who decides if your DVDs, BOSE system, furniture, lingerie, restaurant bills can be charged.

6. When you withdraw money, the bank start charging 24% not just on the amount withdrawn but on the ENTIRE credit balance outstanding at the time. So if you have swiped $4500 on a holiday overseas and find that you didn't have enough cash, you withdraw $500 from the credit card. Big mistake. The bank charges $5000 x 24% the moment you withdraw the cash. $3.28 a day, $100 a month of interest.

So use your cards wisely, pay in full and get all the credit card rewards.