I’ll put my hands up and say – I’m a rates chaser.
For years, I chased the best cashback cards.
I would read articles on finance sites to find out the best cards, and then apply for them.
When I was in the U.K., I would even make long distance calls to Singapore to find out why my cashback of $1.21 didn’t arrive. I didn’t realise the long-distance call probably cost more than that.
Yes, you can call me Mr Kiam Siap.
I got as many as 7 different cards at one point.
Yesterday I read Ramit Sethi’s “I Will Teach You To Be Rich”.
In there, Ramit writes,
you’re smart enough to spend your time doing something better than earning $300/year, something that will let you earn much more sustainably. You’re only earning $0.82/day doing that!
That’s when it dawned on me. Yes, it simply didn’t make any sense.
Whilst this article will share the best cashback cards, it shares more than that. It shares a better way beyond cashback.
Stop chasing the best cashback rates
Let’s assume you spend an average of $500 a month. Groceries, electricity, eating out. You charge all of it to your card.
Let’s say you stumbled on Standard Chartered Smart Credit Card with 6%.
And let’s say I was stupid. I only use (and still use) the UOB One Debit Card rate of 3%.
Each month, you would get $30 in cash back. I would get $15.
Over the year, you would get $180 ($15 x 12 months) more than me.
That seems like a lot.
But step back and think about the time you need researching the cards, applying for the different cards, and you might realise that those 2 or 3 hours, might be better spent elsewhere.
Unless you’re crazy about finance, optimising for cashback may not be the best use of your time.
Naval Ravikant, the angel investor behind the likes of Uber, Yammer, once advised people to have an ‘aspirational per hour rate’. Even when he first graduated, this was $5000 per hour.
His advice is that you do not do anything that earns you below that rate.
There’s a better way.
Spend less, earn more
There are really only two key equations in the road to wealth. Spend less, and earn more.
As someone who’s interested in optimising your finance, these are the only two key principles you need to care about. Rather than thinking about how you can increase cashback for the next dollar, why not think about how you can spend less?
Here, the danger of Cashback, is this.
Chasing cashback may make you spend more
You may want to hit the minimum amount each month to ‘qualify’ for Cashback.
Take a step back and think. Does that make sense?
Does spending more, to get back a few dollars, really count in the long run?
Be 1000x better
The next idea is behind earning more. Why not spend more time figuring out how you can earn with your free time?
As Naval Ravikant adds again,
For example, a good software engineer, just by writing the right little piece of code and creating the right little application, can literally create half a billion dollars’ worth of value for a company.
But ten engineers working ten times as hard, just because they choose the wrong model, the wrong product, wrote it the wrong way, or put in the wrong viral loop, have basically wasted their time. Inputs don’t match outputs, especially for leveraged workers.
Creating more leverage with your time is about being able to improve your earning skill.
Here in Singapore, one of the easiest ways is to go for courses that your employers recognise.
Make sure that it’s something your, or your future employer recognises.
In July 2020, I went for the Advanced Certificate in Learning and Performance, which my employer did not exactly cherish. As a social worker back then, this didn’t directly relate to what I was doing.
It didn’t result in a promotion, even though I spent many nights over 9 months stressing over the assignments.
You thus must know what is valuable to your employer.
One reason why many go for MBAs is because it’s readily recognised across industries, though it may not necessarily help you grow the skills you have.
Cashback, over points back
Here in Singapore, we love our points.
There’s Yuu points, LinkPoints, and so many other points to keep track of.
But points aren’t cash.
They require you to spend more, to get that slight discount.
That’s why my recommendation in looking for any Cashback card is to look at the one that gives you cash, and not points.
Now, that said, let’s go to the best Cashback cards in Singapore.
Best starter option (for students without an income)
Getting the UOB One Debit Card will be the best way you can get immediate Cashback.
The beauty of the UOB One Card is that it doesn’t give you points, but instead gives you cash. No questions asked.
At the end of every month, you see cash back into your bank account.
Best credit card option (for those with official incomes)
The best credit card is still the Standard Chartered Smart Credit Card.
- No annual fees
- 6% cashback on everyday spend at merchants across fast food dining, coffee and toast, digital subscriptions and on your daily commute (Bus/MRT).
- No minimum spend requirement!
Best credit card option for freelancers, and the self employed
I confess. I don’t contribute to my CPF. As someone who has gone fulltime into business since October 2021, the initial months have been difficult in terms of sustaining a guaranteed income.
Contributing to the CPF may have seemed like the worst thing to do.
Thus, in the two attempts applying for credit cards with Standard Chartered and UOB, they were rejected.
Trust Bank was the only one which gave me a credit card.
Whilst Trust does not seem to have a Cashback system, they offer LinkPoints, which can be used across the FairPrice Group.
Today, they are the only card I use.
Stop chasing the cashback, get your life back
If we are honest with ourselves, the time adulting gets ‘real’ is the time when we realise we now spend time reading guides on tax, how to pay our credit card bills, and how to buy a house.
For some, that may be fun.
For others, that may not be.
Getting your life back is about automating your expenses, and income, so that you work hard for you, even as you sleep.
Chasing the cashback may not be the best option.
Get your life back.