Tim Talks Money AMA #3

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Whether it's about navigating the latest market events, unpacking a complex financial concept, understanding the various asset classes or simply sharing practical money tips you can use day-to-day, this is your chance to ask me anything (AMA). 

If you have a question that you want to see answered in a future post, submit here.

Q: Why are the share prices of Singaporean banks at all-time highs even though Trump won the election? Is it time to invest in bank stocks now at these record-high prices?

Singapore banks have had an impressive run over the past few years. It’s basically come down to one thing; rising interest rates. The higher the interest rate, the more money banks make from what’s called the net interest margin (NIM).

That’s the difference between the rates they lend at (which tend to be higher) versus what they pay on desposits, which are usually super stingy. Unsurprisingly, that spread between lending and deposit rates has widened with higher rates and seen the “Big Three” Singapore banks literally “make bank” with their net interest income (NII) rising to record levels.

So, it’s pretty common knowledge that interest rates have now peaked. In fact, they’re coming down! With that, many expected to see weakening profits from the banks and, thus, lower share prices.

However, it hasn’t exactly worked out that way since banks are still posting record profits. Management at the banks have also been savvy and have been repricing loans periodically to try to mitigate the impact of falling interest rates.

Beyond that, though, there’s a flip side to lower rates and that’s the fact that people are more likely to spend more and invest more. That means while banks’ NII might fall slightly, it should be compensated for by higher fees from wealth management products and other divisions like credit cards.

Finally, a Trump presidency is being seen by stock markets as something which is likely to bring higher inflation given Trump’s love of punitive trade tariffs. If there is higher inflation, then the US Fed will have to slow down the pace at which they cut interest rates and, ergo, banks’ profits should continue to hold up. That’s the story anyway.

Overall, banks in Singapore still have rock-solid balance sheets, plenty of capital and promising profit outlooks. To top it all off, they pay sweet dividends and yield between 5% to 6%. Taken together, that’s why bank stocks are still so popular. Based off just the dividend alone, banks give investors a nice yield compared to assets like T-bills or Singapore Savings Bonds (SSBs) and it’s not exactly the “worst” time to invest in bank stocks.

Q: What are some credit cards that have caught your attention for the upcoming holiday season? 

For December, one card that stands out is the DBS Altitude Card. Normally, this card offers 1.3 miles per dollar spent locally and 2.2 miles per dollar spent overseas. However, this December, there’s a promotion where you can earn 5 miles per dollar (mpd) on foreign currency spending. To qualify, you need to spend a minimum of S$1,000 and this 5mpd rate is capped at S$2,000 of overseas (FX) spend within the month.

To activate this, you’ll need to register via the DBS PayLah! app on 1 December under the promotions section. The bonus miles—2.8 miles per dollar—will be credited by mid-January. For travellers, this is a great deal, as it offsets the typical 3-4% spread that banks charge for foreign currency transactions and makes the cost of “buying” miles with your FX spend more attractive.

Q: Do you prefer credit cards that offer miles or cashback? 

Personally, I’m a miles guy. Miles offer greater flexibility. Even if you can’t redeem them for flights—like when Singapore Airlines redemption seats are hard to get—you can still use them for vouchers or other rewards. 

Cashback, on the other hand, often comes with strict criteria, like minimum spending thresholds, which can be tricky to meet. For me, the value and flexibility of miles outweigh cashback in most cases.

Q: What’s your take on managing multiple cards? Should we diversify or consolidate?

My advice is to consolidate around two or three banks. Handling too many cards—say 10 or 15—can be overwhelming. By focusing on fewer banks, you can pool your points more effectively, making redemptions simpler and cost-efficient.

Each bank typically has its standout cards. For example:

• Online spending: The DBS Women’s World Mastercard is fantastic.

• In-person spending (e.g., PayWave): The UOB Visa Signature or UOB Preferred Platinum Visa are excellent choices.

The key is understanding your spending habits—whether you shop online, pay in-person, or focus on specific categories like dining or travel. Choose cards that align with these behaviours to maximise your credit card rewards.

Got a question? Submit it here and I’ll try to answer it in a future post.