Friday, 22 September 2023

We are shifting our daily news to Gutzy.Asia Support us there!

A crash course on getting emergency cash in Singapore


Credit card cash advances have high withdrawal fees and interest rates. Here’s an option that will actually save you money if you need to borrow cash in a hurry.

Interest rates, terms, and conditions are valid as of 11 October 2016.It’s easy to confuse credit lines with credit cards as they are quite similar, but we can assure you that they both offer very different things. Of all the personal loans available in Singapore, credit lines provide the fastest and most convenient access to cash whenever you need to borrow.

Here’s a crash course on how credit lines work.

What is a Credit Line?

A credit line is an agreement with a bank where the bank promises to lend you any amount of money during a set period of time up to a certain limit.

Unlike a regular installment loan where you borrow a fixed lump sum and pay it off after a certain period, a credit line instead allows you to borrow a flexible amount and only when you need it. A credit line is suitable for you if you have irregular access to funds, but have monthly expenses to pay.

However, be sure to pay back the loan amounts quickly as high interest is charged on any outstanding debt unpaid, usually on a daily basis.

Credit lines also provide quick access to funds as you can withdraw the money you borrow exactly as how you would for your normal savings account. This includes:

  • Withdrawing from an ATM
  • Writing a cheque from a cheque book that links to your credit line account
  • Transferring money to your savings or current account

Credit Line versus Credit Card

Credit lines work similarly to credit cards in that both provide you with ready credit sources up to a limit to be spent on whatever you want. However, that is where the similarities end.

No Withdrawal Fees

Credit cards charge you a cash advance fee, which is 6% of the withdrawn amount or S$15 – whichever is higher. Credit lines do not charge you withdrawal fees at all.

Cheaper Source of Urgent Cash

Credit lines offer lower interest rates on cash as compared to the cash advance feature on credit cards.

When people require cash very urgently, they usually activate the cash advance feature on their credit cards to get a quick loan. However, you could get the same amount of cash at a far lower interest rate through a credit line.

Let’s say you withdraw S$1,000 from DBS Cashline and get a S$1,000 cash advance from a DBS Credit Card.

Comparison of Interest Rates and Charges between DBS Cashline and DBS Credit Card Cash Advance
  DBS Cashline (Credit Line)  DBS Cash Advance (Credit Card)
Withdrawal Fee S$0 S$60 (6% * 1,000)
Interest Rate Incurred on Day 1 19.8% * S$1,000 / 365 Days= S$0.54 28% * S$1,000 /365 Days= S$0.76
Interest Rate Incurred After 30 Days S$16.2 SS$23.0
Total Interest and Charges S$16.2 $83 (S$23 Interest + S$60 Withdrawal Fees)

Between the two, DBS Cashline lets you save S$66.80 due to lower interest and no withdrawal fees.

Note that there could also be a minimum interest rate payable per period as required by the bank.

For example, a DBS Cashline account requires a minimum interest payment of S$10 per month. This means that if your accumulated interest payable that month is lower than S$10 (e.g. you did not borrow any money), you would still have to pay the minimum interest payment regardless.

Welcome Gifts

Some credit lines even start you off with cash rebates or other welcome gifts. For instance, anyone who applies for a DBS Cashline account online before 30 November 2016 gets S$80 NTUC FairPrice vouchers upon approval.

The Key to Paying Less With a Credit Line

As with all banking products, interest rates should be your top concern. Interest is incurred on a daily basis on whatever amount you borrow.

Banks usually offer very low-interest rates in the first year – around 8% to 9% per annum – before raising them to the standard rates after which can be as high as 25% per annum. Make sure you are aware of the how the interest rate changes after the first year.

There could also be a minimum interest rate payable per period required by the bank.

For example, a DBS credit line account requires a minimum interest payment of S$10 per month. This means that if your accumulated interest payable that month is lower than S$10 (e.g. you did not borrow any money), you would still have to pay the minimum interest payment regardless.

A credit line charges a daily interest rate on any money you borrow. This means that your outstanding balance is increasing every day that you do not pay it off.

When you miss a bill, you will be charged an additional late fee on top of the daily interest on your outstanding balance.

Always pay back any amount you borrow with a credit line as soon as possible., Singapore’s go-to personal finance comparison platform, guides consumers on the best money habits with its credit card comparison tool and allows real-time personal loans product comparison.

Notify of
Inline Feedbacks
View all comments

Latest posts

Election surprises and certainties: Dissecting Tharman’s presidential win

In the 2023 Presidential Election, Mr. Tharman Shanmugaratnam secured a stunning 70.4% landslide victory, surprising many, including himself. Despite expectations that TKL would win the opposition votes, voters from both camps showed a preference for Tharman's charisma and perceived competency. As Singapore reflects on the outcome, questions arise about the election's fairness and the real implications of Tharman's dominant win.

Volunteer as a Polling and Counting Agent for Singapore’s 2023 Presidential Election

For the upcoming Singapore Presidential Election on 1st September, members of the civil society have spearheaded an initiative to strengthen our democratic fabric. We invite committed individuals to join us as Polling and Counting Agents, standing together for a transparent, fair, and just election. This vote counting exercise, organized by members of civil society, is not specifically in support of Mr Tan Kin Lian, a candidate in the upcoming Presidential Election. It's an exercise in active citizenry. Nonetheless, Mr Tan endorses this initiative, which hinges on his candidacy, championing transparency, and has given permission for the results to be shared publicly.

Reflections from the Centenary: The Legacy of LKY and Singapore’s Future

Gilbert Goh reflects on the LKY centenary event: an inspiring showcase of a leader's global legacy juxtaposed against current challenges, urging Singapore to continue its path of progress.

Lim Tean advocates for Tan Kin Lian: A visionary leader for Singapore’s Presidency

In his speech at Mr Tan Kin Lian's launch of his presidential bid, Mr Lim Tean passionately championed the need for a truly Independent President. Highlighting Mr Tan Kin Lian's unique credentials and genuine concern for the wellbeing of Singaporeans, the Peoples Voice leader emphasized the pressing challenges of rising living costs and job insecurities faced by the public. Mr Lim depicted Mr Tan Kin Lian as a beacon of hope for the nation, advocating for a leader who genuinely understands and represents the people’s aspirations.

Tan Jee Say endorses Tan Kin Lian for President: A courageous, genuine, and humble...

In advocating for a truly representative leader, Tan Jee Say underscored Tan Kin Lian's humility, courage, and genuine dedication. Highlighting the pressing need for restored public trust and effective independence, Tan Jee Say emphasized that Tan Kin Lian, as the 'People's President', would bring back hope to Singaporeans and champion true democracy

Tan Kin Lian’s pledge: Rekindling unity and charting a vigorous future for Singapore

In the press conference to announce his bid for the Singapore presidency, Tan Kin Lian emphasizes safeguarding Singapore's reserves and strengthening public service integrity. Drawing on his 30-year leadership at NTUC Income, he envisions a future with affordable living, accessible housing, and job stability, pledging collaboration with the government for a united nation.

Strengthening Singapore’s political foundations: A call to action by Leong Mun Wai on Singapore’s...

Leong Mun Wai urges Singaporeans to strengthen political checks and balances, emphasizing, 'The best is yet to be for Singapore if we dare to make the right decision in upcoming elections.

Trending posts