Credit card

A credit card is a payment card issued to users (cardholders) to enable a cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the amounts plus the other agreed charges. The card issuer (usually a bank) creates a revolving account and grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a merchant or cash advance.

A credit card is different than the debit card or ATM card, which requires the balance to be repaid in full each month. In contrast, credit cards allow the consumers to build a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used by the currency of the owner of the card. A credit card differs from a charge card also in that a credit card typically involves a third-party entity that pays the seller and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer until a later date.

The minimum as part of the Monetary Authority of Singapore (MAS) regulations in default is $30,000 for individuals below the age of 55 years old. The aim of this regulation for holders of the credit card is to provide eligible individuals with a convenient mode of payment and access to the short-term credit when they need it, while encouraging prudent borrowing and lending practices.

To minimise the risk of cardholder borrowings beyond their means, the maximum amount of credit that each financial institution can extend to a borrower is capped at four times his monthly income. This limit applies regardless of the number of credit cards a borrower has with the same financial institution.

Further, there is an industry-wide borrowing limit on the amount of unsecured credit that all financial institutions can provide to the same borrower. The limit will progressively be tightened to 12 times the cardholder's monthly income by June 2019.

Financial institutions are required to conduct fresh credit bureau and income checks on borrowers, when they receive applications for new unsecured credit facilities or credit limit increases. They must also conduct such checks where there are signs of potential debt problems. These checks will help financial institutions to decide whether to extend credit to the borrower or make adjustments to any existing credit granted.

But there is always an alternative to apply for a credit card if the minimum income requirement does not met. Some banks will allow you to apply for a secured credit card without meeting the minimum income requirement if you are between 21 and 70 years old of age and maintain a fixed deposit account with a minimum of $10,000 requirement.

Some credit cards provide a lifeline for those who cannot meet the stringent requirement:
 * Standard Chartered Manhattan Card ($18,000 and above)
 * Bank of China F1RST Card ($18,000 and above)
 * Diner's Club ($16,000 per year)

Prepaid card
A "prepaid credit card" is not a true credit card, since no credit is offered by the card issuer: the cardholder simply spends money which has been stored via a prior deposit by the cardholder or someone else, such as the parent or the employer. However, it carries a credit card brand (such as Visa, MasterCard or American Express), and can be used in similar ways just as though it was a credit card. Unlike debit cards, prepaid credit cards generally do not require a PIN. An exception is the prepaid credit cards with an EMV chip. Those cards do require a PIN if the payment is processed through a Chip and PIN technology.

After purchasing the card, the cardholder loads the account with any amount of money, up to the predetermined card limit and then uses the card to make purchases the same way as a typical credit card. Prepaid cards can be issued to minors (above 13) since there is no credit line involved. The main advantage over secured credit cards (see above section) is that the cardholder is not required to come up with $500 or more to open an account. With prepaid credit cards purchasers are not charged any interest but are often charged a purchasing fee plus monthly fees after an arbitrary time period. Many other fees also usually apply to a prepaid card.

Teenagers can only use funds that are available on the card which helps promote financial management to reduce the risk of debt problems later in the life.