Hong Kong credit cards by income requirement and annual fee

If you are shopping for a credit card, I've compiled a list of the most popular bank-issued credit cards in Hong Kong sorted by income requirement. This is my independent analysis and there are no referral links that I make money off of.

Table of cards

Minimum Income Requirement

A misconception is to choose a credit card if you meet the minimum annual income requirement for the card. e.g. if the requirement is 96K per year, you choose the card with the 96K requirement because you make that much per year.

The minimum income requirement is for the bank to reduce the pool of ineligible applications and not for you. Typically, the higher the income requirement for the card, the greater the card's benefit.

To understand why the minimum income requirement is not a useful measure for most people, think about whether you pay for all your expenses each month by credit card. Most people do not pay for all expenses by credit card if they rent, because most landlords ask for a bank transfer. Accepting rent payments by credit card incurs a cost to the landlord as they have to pay credit card processing fees. If you made 96K per year, perhaps half or more of that - 48K/year - could go towards rent given how expensive Hong Kong is.

If you do happen to have a card supported by RentSmart, then you may be better off receiving cashback or miles when you pay rent with a credit card provided your limit is high enough. e.g. if RentSmart charges you a 1.5% fee to pay the rent via the Mox card, but Mox rebates you 2%, you get 0.5% net cashback for paying rent!

I consider rent a fixed expense and non-disposable income. Only what remains after I pay my rent is disposable income that I can choose to put on a credit card.

Annual Fee

The annual fee is typically priced around 1 to 2% of the minimum income requirement. I think this is based on the past - decades ago - when banks thought consumers would think that seems like an acceptable and small enough rate in the order of a rounding error. These days, the rates are trending down due to regulations or market competition.

If you agree with the assertion that most people spend less than half their income on a credit card each month, then the annual fee is actually priced at 2 to 4% of disposable income. It is absurd to me to tell anyone to spend that much money for the privilege of paying by credit card that carries a 30% interest rate.

Annual fees help the bank recuperate the costs of the benefits that come with the credit card. This means the benefits are designed to be up to the cost of the annual fee in many cases. It is easy to understand if the benefits provided are worth more than the annual fee, the bank would be easily losing money if that was their sole source of income. This means the bank finds ways to make sure it is hard or impossible for you to get your annual fee's worth back. Let me give you an example

If the annual fee is $1800 and the card offers a 5% cashback at supermarkets, most likely the bank is allowing you to earn up to $1800/12 = $150/month from supermarket purchases. $150/5% = $3000/month spend at supermarkets in order to reach the $150/month cap (limit). If you don't spend $3K/month at the supermarket, then the bank is already making money off the annual fee you paid as they are not paying you with as much cashback.

Therefore, most people benefit from cards that have no annual fee and no spend requirement. There is no pressure to spend money in order to "earn back" what you paid as an annual fee with the credit card.

Cards without a 1M bank account balance

If you agree with my thoughts above, then that really leaves you with 5 potential card choices if you don't have more than $1M in the bank account. Higher-end credit cards require a Total Relationship Balance (TRB) or minimum amount of cash or investments held at the bank issuing the credit card instead of a monthly income requirement.

All of these are great cards. Which one you choose will more likely be based whether the card offers you rewards in the categories you value. If you read my SC vs Mox review, I think the Mox card is better than the SC one. In fact, even if you qualify for high-end cards with a $1M+ TRB requirement, the Mox card is competitive. Mox is a great everyday card for cashback for local spend.

Mox also does something unique that should essentially wipe out 80% of the cards in Hong Kong and also reduce the number of physical cards you need to carry from 3 to 1 because you can:

1. Switch between debit and credit modes.
2. Switch between the unlimited cashback or AsiaMiles earned.

Without Mox you would have 1 debit card, 1 credit card earning cashback and 1 credit card earning airline miles.

Cards for $1M+ TRB

Without going into too much detail, the cards below have rewards associated with travel. For many individuals with $1M+ in the bank, travel is a big category of spend, which is why the cards below have mostly travel rewards such as AsiaMiles.

You have a choice in the 3 cards listed at the top, and the rest are only obtainable if your bank invites you.

I will review the cards separately in another post.

Takeaway

Mox card is one of the best credit cards in Hong Kong regardless of your income. There is no spend requirement and no annual fee. Mox also allows you to switch between credit and debit modes, in addition to getting cashback or AsiaMiles.