Shell Citibank Credit Card - A Cash Draining Card ?
Are you fancy of getting a credit card that offers 5% rebate on shell petrol and 1.5% rebate on other purchases?
If your answer is yes, then you are draining your money away!
The newly launched Shell Citibank credit card is not as good as its sounds - to enjoy the rebate, you must have a carry forward balance. Yes, a carry forward balance that you have to pay Citibank 18% interest per annum. But that's is not all, your so called 'rebate' is based on your current month spending. That means if you have a carry forward of RM10,000 but did not use the card at all for the current month, you get 'zero' rebate.
To be precise, this 'rebate' card is an old card - it has been around for about 2 years. But now taking advantage of the fuel cost concern, Citibank co-branded it with Shell.
This is how the rebate scheme works:
- First, you need to have a carry forward balance. The amount of that carry forward determines the rebate rate (%) that the card holder is getting.
- Then based on your current month spend, you will get the rebate (as shown by the rebate table above) - your rebate is not based on your total carry forward balance. Repeat: your rebate is not based on your total carry forward balance, but current month spending.
In short, to get your 'rebate' you must have at least of RM2,000 outstanding balance in you card AND continue use the card. The outstanding balance is the net of previous month balance minus current month payment. If you do that, every month you will be paying RM30.00, or RM360 a year for the minimum RM2,000 outstanding balance.
Let's do a simple math here:
If you spend RM500/mth on shell petrol and your classic card has a RM2,000 outstanding balance, at 1.5%, you are getting RM7.50 as 'rebate', while at the same time, paying RM30.00 for the interest. The 'nett' profit for Citibank is RMRM22.50. Your are essentially "over paying" 4 times the price (30/7.5)
To 'break even' (so that your RM30.00 interest payment = rebate value), you need to pump RM2,000 shell petrol a month, or charge RM6,000 a month for non-shell related purchases.
If you spend RM500/mth on shell petrol and your classic card has a RM2,000 outstanding balance, at 1.5%, you are getting RM7.50 as 'rebate', while at the same time, paying RM30.00 for the interest. The 'nett' profit for Citibank is RMRM22.50. Your are essentially "over paying" 4 times the price (30/7.5)
To 'break even' (so that your RM30.00 interest payment = rebate value), you need to pump RM2,000 shell petrol a month, or charge RM6,000 a month for non-shell related purchases.
The USD100.00 per barrel of crude oil won't kills you, but the Citi-Shell card will.
Publish by http://smartconsumerbanking.com/2007/11/23/shell-citibank-credit-card-a-cash-draining-card/
As Good As Cash Back - UOB One Card?
The lure of cash rebate on everything from grocery shopping to entertainment is always tempting, but does UOB One Card’s Everyday needs, everyday rebate lives up to its claim?
Credit card is a very lucrative but is also a highly competitive business. If the statistic from the newspaper is correct, on average, each of us is having 3.5 credit cards (2.5 million people owned credit card and there are 8.8 million credit card in circulation). The challenge to the banks is how to get the cardholder uses its card every time, or to make that particular card the ONE and preferred card? An attractive loyalty programme, may be? UOB Bank thinks it may have found one with it Cash rebate credit card. Cash rebate credit card allows you to get cash rebate when you use your credit card. Cash rebate credit cards is a powerful incentive for consumers – we all like the idea of getting something back every time we make a purchase.
Credit card is a very lucrative but is also a highly competitive business. If the statistic from the newspaper is correct, on average, each of us is having 3.5 credit cards (2.5 million people owned credit card and there are 8.8 million credit card in circulation). The challenge to the banks is how to get the cardholder uses its card every time, or to make that particular card the ONE and preferred card? An attractive loyalty programme, may be? UOB Bank thinks it may have found one with it Cash rebate credit card. Cash rebate credit card allows you to get cash rebate when you use your credit card. Cash rebate credit cards is a powerful incentive for consumers – we all like the idea of getting something back every time we make a purchase.
Cash Rebate is not Cash Back
- First thing first, UOB One card’s Smart$ cash rebate is not a cash money; it does not gives you cash back. Instead of reward points or air miles, the UOB One card rewards you with Smart$ cash rebate, a sort of ‘currency’ that you can use to purchase services or good within its merchant network. The Smart$ cash rebate is not exchangeable for cash.
How it works
How it works
- The UOB one card gives you a predetermined rate of cash rebate whenever you use the card. The one good things about UOB one card is it uses an ‘open’ merchant system which means you earn cash rebate every time you use the card, the down side is you only earn 0.3 cent for every single Ringgit charged, or 0.3%. If you want more, you can use your card within UOB Smart$ Merchant network that gives you 3% cash rebate. In addition, you will get a higher cash rebate when shop with the One Card Merchant network, pending on the retailers/merchants, the cash rebate is between 2-4%.
How to redeem
How to redeem
- Since those hard earn Smart$ cash rebate is not cash money, you can only redeem them with the One Card and Smart Merchants network, like it or not. And you better hurry, because the Smart$ cash rebate is only good for one year. All together, there are about 400 different types of merchants available but realistically speaking, the most relevant redemption will be on grocery purchases and some dinning, considering the how hard to accumulate those Smart$ cash rebate.
The merchant coverage
The merchant coverage
- Since UOB One card use an ‘open’ system where Smart$ cash rebate is rewarded every time the card is used, the coverage is not an issue. However, you might want to take note that some of the participating merchants have a similar deal with other banks and that mean you can have the similar ‘benefits’ without having the UOB One Card.
The Bottom Line
The Bottom Line
- Cash rebate offers a very attractive proposition for consumer. Most of the people would find the word ‘cash rebate’ more powerful then the reward points of air miles. But does the powerful cash rebate translate to better ‘benefits’ to credit cardholders? If you are like me looking at the reward conversion rate i.e., how much is given back on every single Ringgit charged (forget the form of reward for awhile), you will find the UOB One Card is on-par with other credit cards – no better or worse. On top of the conversion rate, there are some details that worth paying attention. Take Carrfour for example, no Smart$ cash rebate will be given on special price or promotional items – a tough task of not to pick up any promote/special price item given how the hypermarket competing with each other now. And on the BH Petrol, the cap of RM400/mth means the maximum Smart$ cash rebate one can earn is only RM8.00.
The best way to think about UOB One Card is to treat the Smart$ cash rebate as a discount coupon that you can use on selected stores. The good thing about this coupon is that you decide how and where to use it, thus offers a relatively greater flexibility (subjects to the participating merchants) then the ‘traditional’ points or air miles redemption programme.
Lastly, remember to pay your card balance in full and on time. If not, you will find the 18% interest rate outweigh what ever cash rebate awarded to you.
The best way to think about UOB One Card is to treat the Smart$ cash rebate as a discount coupon that you can use on selected stores. The good thing about this coupon is that you decide how and where to use it, thus offers a relatively greater flexibility (subjects to the participating merchants) then the ‘traditional’ points or air miles redemption programme.
Lastly, remember to pay your card balance in full and on time. If not, you will find the 18% interest rate outweigh what ever cash rebate awarded to you.
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