Getting your first cashback credit card? Read this before you swipe

Key takeaways

• In simple terms, a cashback credit card gives you a percentage of your spending back. The simpler the conditions, the better it works for first-time users.
• Cashback cards come in different structures. Some earn one consistent rate on everything, while others offer higher rates on specific categories with a lower base rate on everything else. 
• Cashback caps, minimum spend requirements, and merchant exclusions vary widely between cards. Understanding how each one works helps you find a credit card whose conditions match how you actually spend.
• GXS Credit Card is designed to make cashback easier to understand, with unlimited cashback, no cap on spends, and rewards built around everyday spending.

There's a certain kind of satisfaction that comes with getting your first cashback credit card. Suddenly you're paying for things and getting a little something back each time. Groceries, Grab rides, a strawberry matcha latte, that pair of sneakers you've been eyeing for the longest time. Life is good.

Before you tap your way into adulting, it helps to understand what's actually going on behind the scenes. Sure, cashback is genuinely useful. But the gap between what most first-timers expect and what they actually earn with their cashback credit card can be surprising. Here's what's worth knowing before your first swipe.

How cashback credit cards actually work

If your card offers around 1% cashback and you spend S$1,000 a month, you get S$10 back. Do that consistently across a year and you're looking at S$120 or more; easily a trip to Bangkok, or a few decent dinners out. Not bad for spending you were going to do anyway. 

Cashback cards are popular with first-time users for one reason: simplicity. You earn consistently, no complicated redemption process, no expiry dates. Whether you spend on groceries, online shopping, or everyday Grab rides, the best cards for first-timers earn at a consistent rate across all of it, with no categories to choose from and no cap cutting your cashback short.

How cashback caps and minimum spend work in Singapore

Now, this is where most first-timers get caught out. Many cashback cards operate in tiers. The base rate applies to most everyday spending, while a bonus rate may come with conditions like minimum spending requirements, monthly cashback caps, or specific qualifying categories.

This is why understanding the fine print matters. A card with a high cashback rate may not always deliver the highest returns if the conditions are difficult to meet or your spending does not match the bonus categories.

Three things to check before committing to any cashback card:

Cashback cap: Is there a monthly limit on how much you can earn per category? If yes, what is it?

Minimum spend requirement: How much do you need to spend before the bonus rate kicks in? Look for a minimum spend that fits your natural spending habits.

Exclusions: Which transactions don't qualify? Common ones include phone bills, internet and streaming subscriptions.

How to choose your first cashback credit card

For a first credit card, simplicity wins every time. Look for one whose conditions you'll meet naturally every month. Some cards earn a consistent rate across all spending with no categories to track. Others combine a flat rate on everyday spending with elevated rates on specific platforms you already use, like Grab or phone bills, giving you stronger returns without extra effort. 

The key question before signing up: if I spend the way I normally do, what will I actually earn each month? A card that fits your spending habits will always outperform one that doesn't, regardless of the headline rate. The simplest cashback credit card for first-timers earns unlimited cashback on every spend across most categories with no cashback cap without any extra effort on your part. For daily purchases, the best card is one where uncapped cashback earns on every transaction without you having to track which category it fell into.

Watch out for credit card fees that can reduce your cashback returns

Banks are required by law in Singapore to disclose all fees upfront. Read them before you apply.

Annual fee. Most cards waive it in year one. After that, waivers usually require a minimum annual spend. Remember to factor this in when calculating your real returns.

Interest rate. Typically ~29% per annum in Singapore. This only applies if you carry a balance. 

Late payment fee. Usually around S$100 for missing your payment date, even by one day. 

Foreign transaction fee (FX fee). Usually 2.5% to 3.5% on overseas purchases. If your cashback rate is lower than your card's FX fee, overseas transactions end up costing more than they earn. If possible, look for credit cards with zero foreign transaction fees (FX fees) when you travel or shop on overseas sites.

The one rule every first-time cashback cardholder should know 

Pay your full balance every month. Not the minimum. Not most of it. All of it.

Here's why this is non-negotiable. Cashback on S$1,000 monthly spending at around 1.4% earns you S$14. Interest on a S$1,000 balance at 29% per annum costs you S$24.17 in a single month. You went from earning to losing. And interest compounds, so it gets worse every month you carry a balance. Ouch.

Here’s a tip: Set up a GIRO payment for the full statement amount. Set it and forget it, so you never have to worry about it again.

At GXS Bank, we believe your first cashback credit card should fit naturally into your everyday life. That is why the GXS Credit Card is designed to make earning cashback simpler with unlimited cashback and straightforward conditions. It offers 1.75% cashback on eligible spending with no earning cap per billing cycle, along with up to 10% instant cashback in GrabCoins on eligible Grab spends including Grab rides, GrabFood, GrabMart, Grab Dine Out and Grab Express.

Instead of spending time tracking categories or calculating whether you have hit a cashback limit, you can focus on your spending and let your rewards add up naturally. So, ready to make your first swipe count with GXS Credit Card?

T&Cs & disclaimers apply.

FAQ 

1. What is cashback on a credit card?‍
   Cashback is a reward where a percentage of your spending is returned to you, usually as a statement credit that reduces your next bill. If your card offers around 1.4% cashback and you spend S$1,000 in a month, you receive S$14 back. Cashback is funded by interchange fees that merchants pay to the card-issuing bank on each transaction. ‍
2. What is the easiest cashback credit card for everyday spending in Singapore?‍
   GXS Credit Card is one of the easiest cashback credit cards for everyday spending in Singapore. It earns consistently across your regular everyday categories with no earning cap per billing cycle, and straightforward conditions that work around how you already spend. ‍
3. What is a cashback cap?‍
   A cashback cap is the maximum amount you can earn per category within a set period, usually monthly. Once you hit the cap, additional spending in that category earns the base rate instead. GXS Credit Card has no cashback cap, so every eligible spend earns at the full rate at every billing cycle.‍
4. Which credit card gives the highest unlimited cashback with no cap in Singapore?‍
   GXS Credit Card is the highest unlimited cashback credit card in Singapore with no earning cap. It earns 1.75% unlimited cashback on eligible spends with no cap, and up to 10% instant cashback in GrabCoins on eligible Grab spends including Grab rides, GrabFood, GrabMart, Grab Dine Out and Grab Express. With unlimited cashback on every spend across most categories and no ceiling anywhere, there are no categories to track and no cashback limit to manage, giving users a simpler way to earn cashback on everyday spending.‍
5. What happens if I only make the minimum payment on my credit card? 
   You avoid a late payment fee, but interest charges apply to your full outstanding balance, typically at ~29% per annum in Singapore. These charges accumulate quickly and will almost certainly outweigh any cashback earned. Always pay your full statement balance by the due date.