Finance 101 - updated

Contrary to some advice, I always believe in credit cards. They give cash rebates or points for your expenditures, and since a baby cost $30000 a year to raise, the amount you receive can be substantial. The trick of course is not to leverage and pay your credit card in full every single month. Below are details of how much I receive from banks and how it was done:

Credit Card:

Specialist cards:

1)      Citibank Dividend Card – used mainly to buy groceries. Gives 5% cash + Citi rebates. If I apply this to Babyfood($812.85) and BabyDiapers($624.66) – see http://accountingforbaby.blogspot.com/2015/04/the-cost-of-raising-one-year-old-baby.html/ for detailed one year expense, I receive a total rebate of $71.87 for one year.

2)      OCBC 365 Card – used for medical expenses. Gives 3% cash rebate. Pre-requisite is to spend $600 per month, otherwise only receive 0.5% rebate. In addition, total spending above $500 per month will increase your 360 saving account interest rate by 0.5% per annum. If I apply this to pediatrician($4290.53) for the 3% cash rebate, I will get  $128.71 per annum.

3)      UOB One Card – used to pay infantcare. Gives 3.33% rebate paid quarterly if spent above certain level. In addition, total spending above $500 per month will increase your UOB One savings account interest rate. If I spend $800 using this card, I will get $320 per annum.

4)      Stanchart Bonus$saver Card – Used to pay infantcare. Charge above $500 to earn 1.88% per annum for deposit.

Generalist cards:

1)      Amex True Cashback Card – Gives 5% cash rebate for first 3 months. Subsequently, 1.5% cash rebate. No min spending.
2)      ANZ Travel Card – Gives equivalent of 1% cash rebate. No min spending. Redeem cash rebate after hitting certain points.

Assuming I spend 1/3 of total expense ($10000) using generalist cards at 1% cash rebate, as a conservative estimate, I get $100 per annum.

Total cash rebate from credit card is $51.70/mth.

Deposits:

1)      OCBC 360 account – You can qualify for 2.2% per annum interest rate by doing the following: (1) credit salary to get 1.2% (2) pay any 3 bills online or giro to get 0.5% (3) spend at least $500 on OCBC credit cards to get 0.5%. The 2.2% applies to first $60000 of your account and you get $110 per month. Details herehttp://ocbc.com/personal-banking/Accounts/360-account.html/

2)      UOB One account – Similar concept to OCBC 360 but with more tiers. See details herehttp://uob.com.sg/personal/deposits/chequeing/one_account.html . Basically for a $50000 deposit, with UOB credit card spent + 3 Giro transactions will give you an effective interest rate of 2.4%. That’s equivalent to  approx. $100.80

3)      Stanchart  Bonus$Saver – Simply spend more than $500 using Stanchart Bonus$aver card to get 1.88% on first $25000 of deposit. You will receive $39.10 a month. More details herehttps://www.sc.com/sg/save/current-bonussaver.html/

That’s a total of approx. $250/mth of interest. Add in the monthly cash rebate from cards, I get $301.70 a month. That is equivalent to free diapers and milk powder every month!