Some Singapore banks are raising credit card interest rates and surcharges

At least two banks in Singapore have announced modifications to credit card interest rates and surcharges.

One of them is HSBC, which is increasing the annual percentage rate on outstanding credit card balances from 25.9% to 26.6%.

Late payment costs – an extra flat fee charged to credit cardholders who fail to pay the minimum amount by the due date – will increase from S$55 to S$100.

Additionally, administrative costs for foreign currency card transactions will increase from 1.8% to 2.25 %.

These modifications will take effect on January 4, 2023.

The most recent change to HSBC’s interest rates was made in August 2017, while the administrative fee for foreign currency transfers has not been altered since November 2018.

The forthcoming change of credit card fees and charges is part of the bank’s “monthly review” and is “consistent with industry norms,” according to a bank spokesman who spoke with CNA.

This year, the bank has not witnessed a significant increase in late payment fees.

In October, another foreign lender, Maybank, altered its fees and charges.

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The annual percentage rate for credit card customers who do not pay their balances in full by the due date or obtain a cash advance has increased to 26.9% from 25%.

Those who make late payments will be penalized the greater of 5 percent of the minimum payment due or S$100. Previously, the cost was equivalent to 5% of the minimum payment required, or S$80.

Maybank also increased the price for cash advances, which are loans carried out against a customer’s credit limit. This is now a minimum of S$15 or 6% of the cash loan, whichever is greater, as opposed to the prior minimum of S$15 or 5%.

Other lenders who responded to CNA’s inquiries stated just that their fees and levies are routinely assessed.

The largest bank in Singapore, DBS, performs quarterly evaluations of interest rates depending on market circumstances and economic developments, according to the bank.

Since the end of 2018, its interest rate on outstanding credit card balances has been 26.8 percent.

Credit card owners should also be aware that card-related costs that are subject to the Goods and Services Tax (GST) will likely be amended next month, when the GST will increase from 7% to 8%.

This includes yearly credit card fees.

Citibank, for example, said on its website that the annual membership fees for its credit cards “would be amended to reflect the change in the GST rate to 8%, where applicable.”