OCBC NXT Review: Putting the W in Cashflow

In a world where credit cards are judged largely by their cashback percentages or mile per dollar earn rate, OCBC NXT offers a dramatically different value proposition. Instead of giving you high upfront rewards, OCBC NXT stretches your payment over 3, 6, or 12 months depending on your spending.

The card’s old name included “CashFlo” (indeed with the “w”) which is perhaps a much better description of what the card helps you achieve – better cashflow on your expenses. Cashflow is king particularly when interest rates are high, and we are indeed in a relatively high interest rate environment. This card does have a few compelling use cases given the rates we can get from bank deposits these days.

How OCBC NXT works

When you spend on your credit card, you usually have a month or so to pay off what you owe with zero interest. OCBC NXT extends the interest-free period to 3 or 6 months depending on how large your transaction amount is.

For transactions under S$1,000, they are split into 3-month instalments. Those S$1,000 and above are split into 6-month instalments.

You are able to set a Trigger Amount for the splitting to happen, with S$100 being set as the default. The Trigger Amount can also be changed as long as you set it to a multiple of S$100, and it cannot go below S$100. The lowest amount a transaction needs to be before being split is therefore S$100.

Essentially, the OCBC NXT is a Buy Now Pay Later (BNPL) card with the notable advantage of being usable virtually anywhere that accepts Mastercard payment.

It also gives cashback

While I did say OCBC NXT offers something different from cashback or miles card, it still gives a little bit of cashback. And a little bit it is, with just 0.5% rebate if the monthly bill is under S$1,000, and 1% when it exceeds S$1,000.

Spending S$6,000 results in the transaction being split across 6 months, and since each bill would be S$1,000, there is a 1% cashback to be earned. It’s a small amount, but again, the main draw of this card is spreading your payment across a longer time period.

First use case: big expenses

One of the use cases I can think of would be that this card is pretty useful for large expenses.

Given a S$6,000 spend, not only are you getting $60 of cashback over the 6 months (1% rebate), your funds also sit in your bank account for a longer period of time.

At various interest rates, we can get the following interest:

Month	Balance	5% p.a.	4% p.a.	3% p.a.
1st	S$6,000	S$25	S$20	S$15
2nd	S$5,000	S$20.83	S$16.67	S$12.50
3rd	S$4,000	S$16.67	S$13.33	S$10
4th	S$3,000	S$12.50	S$10	S$7.50
5th	S$2,000	S$8.33	S$6.67	S$5
6th	S$1,000	S$4.17	S$3.33	S$2.50
	Total	S$87.50 (1.46%)	S$70 (1.17%)	S$52.50 (0.88%)

On top of the 1% cashback, we get to extract the time value of our funds just by having the money sit in our bank accounts. With bank accounts giving anywhere between 3 to 5% p.a. these days, it’s not too farfetched to get anywhere between additional 0.88% to 1.46% of “rebates” on our spend.

With a combined 1.88% to 2.46% rebates (cashback + bank interest) possible, this makes the OCBC NXT card pretty alright for really large transactions where other cards just taper off in earn rate due to caps on their high earn rates.

I think the proposition of this card starts to become increasingly obvious when your spend amount increases. Few credit cards can deal with something like a S$30,000 transaction and still give a reasonable amount of rewards.

Second use case: GE premiums

The OCBC CashFlo card was marketed quite heavily as the credit card to use for Great Eastern policies, and the OCBC NXT retains this feature. Though the feature has been somewhat nerfed some time back, it remains a viable option for GE policyholders to consider when paying for their premiums.

When an insurance policy is paid annually, there tends to be some savings on the premium. According to my GE contact, it is 3% more expensive to be paying for your GE premiums on a monthly basis compared to a yearly mode.

Paying for your policy on a yearly basis, however, means that the funds don’t get to sit in your bank account. OCBC NXT can therefore give you the best of both worlds – get the lowered premium for paying your GE policy yearly, but still be able to pay the bill on a monthly basis instead.

When GE premiums are charged to the card, there is a 1% surcharge, and no cash rebate would be applied since insurance (among other commonly excluded items) are not eligible for the card’s cashback. However, there is no minimum amount for the transaction to be split, and it is automatically spread across 12 months instead of the usual 3 or 6-month period.

If you can get at least 4% p.a. for your funds, I think it’s well worth paying the 1% surcharge. If you’re paying for your premiums on a monthly basis, annual mode is definitely something you should look at to get some savings.

Third use case: Grab top-ups?!

Another use case sees us going into the finhack realm of things, and we revive a dear old wallet friend we all thought we buried – GrabPay.

The GrabPay game is all but dead in mid-2023, with Amex being the last major credit card company to finally exclude all rewards relating to Grab top-ups, and UOB Absolute giving only a paltry 0.3% cashback – a drop from its previous 1.7%. OCBC NXT, however, breathes a bit of life into GrabPay again.

If we revisit the table I did just now, you can get anywhere between 0.88% to 1.46% of “rebates” indirectly by having funds sit in your bank account:

	5% p.a.	4% p.a.	3% p.a.
Total	1.46%	1.17%	0.88%

Note that this assumes your transaction is at least S$1,000 to be split across 6 months, and interest rates maintain the same for the duration.

Just like insurance premiums, Grab top-ups attract no cash rebate from OCBC NXT, but even at a relatively low 3% p.a. rate from your bank account, 0.88% is almost 3 times the reward UOB Absolute currently offers for Grab top-ups. If you fulfil the conditions for accounts like UOB One or OCBC 360, this use case become even more compelling.

GrabPay is still ubiquitous around the country, with many neighbourhood shops and higher-end retail stores alike accepting the payment method. Even if a particular business does not accept GrabPay QR, it is highly likely they accept PayNow which Grab wallet also supports.

There are plenty of big-ticket items I can think of that would benefit from this: enrichment centres, massage parlours, even renovation companies may tend to accept only PayNow rather than credit cards, and the OCBC NXT + GrabPay pairing can work quite well for such payments.

4th use case: AXS perhaps?

In fact, it may well be a great way to pay all manner of things on AXS and get cashflow on bills that are normally excluded by credit cards. I haven’t personally tried this, but OCBC only states this when referring to transactions that won’t be split:

Selected transactions will not be converted automatically to instalments, e.g. cash advances, cash-on-instalment, balance transfers, transactions made at premises of or relating to casinos or online gambling entities etc.

It seems AXS transactions are fair game to be split into instalments, and this is another compelling use case to explore.

Beware instalments crossing over card anniversaries

Now this is something that you need to take note of when you put instalments on credit cards:

1. There is usually a penalty if you want to cancel the instalment and pay in full.
2. Banks sometimes do not waive your annual fee

These 2 events are bad when they coincide. You may encounter a situation where you have an outstanding instalment but your bank refuses to waive the card’s annual fee, leading to a situation you either pay the penalty to terminate the instalment, or are compelled to pay the annual fee.

This affects most credit cards as far as I know, but it affects the OCBC NXT a lot more since it is after a card all about instalments.

Thankfully, the card comes with a 2-year fee waiver and will automatically waive annual fees if you reach more than S$10,000 of spend within a year. My advice would be to avoid putting instalments towards the end of your fee waiver period unless you are confident of getting your annual fees waived.

Conclusion

The OCBC NXT card is a very special card that can definitely see some use for quite a few scenarios. This is especially true now that GrabPay Mastercard – once a useful, catch-all card for all kinds of excluded spend – has fallen.

While some see a Totally Useless Card (actual comment on my YouTube video), I see countless of possibilities this interesting card can bring to those with more creative minds, and I suspect you would want to subscribe to the Telegram for more updates to come.

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