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March 29, 2021 by: Susan Paige

Debit Card vs. Credit Card: Which One Should You Get in Singapore?


Paying for goods, services, and other necessities forms an integral part of the daily financial management experience of every Singaporean regardless of their stature in life. From the moment you step out of your house to go to school or work, you are probably paying for something along the way, whether it be a cup of coffee, an article of clothing you’ve seen on the display window at the mall, or your daily ride on the MRT.

Even during the past year when many people have been forced to stay at home during the COVID-19 pandemic, you must have been starting your day buying daily needs such as food, groceries, and medicine online. Forking out money or cash has been the traditional method of financial transactions ever since currency was invented, but with the advent of card payments in recent modern history, thankfully all of these financial activities are now possible.

In fact, it is estimated that the total Singapore card payments reached almost SGD 112 billion in 2019, and they are seen to grow to as much as SGD 158 billion by 2023. These figures point to the sure development of a cashless financial society in the future, thanks to products such as debit cards and credit cards. These are truly useful in allowing immediate, convenient, and cash-free transactions between people and businesses.

The Difference Between Debit Cards and Credit Cards

You may have one of these types of cards or the other, or both, but you may not have really thought about the differences between the two. It is important to understand what is debit card usage and credit card usage so you can make the most out of them and enjoy the benefits that each type of card brings.

Basically, both types of card afford freedom from carrying too much cash especially when commuting or moving around, not to mention safety and security as well when travelling abroad. With modern contactless point-of-sale technologies, payment cards are also so much more relevant these days when sanitation and public health are important considerations to prevent the spread of diseases. You can also use either one when shopping or paying for things online by simply inputting the card number and other security information found on the card.

The basic difference between a debit card and a credit card is their source of funding. When you use a debit card for payment, it deducts money directly from your bank account linked to the card. On the other hand, a credit card posts a debt each time you use it. This amount accumulates and needs to be paid off at the end of each month when you receive your credit card billing statement. If you don’t pay the amount fully, any remaining debt will accrue interest based on the agreed rate when you got the card.

Obviously, you will not be able to use a debit card once the money in your bank account has been used up. A credit card, meanwhile, is usually assigned a credit limit that indicates the total amount you can use to purchase things. In this case, credit cards can be useful for emergency situations or when purchasing things that cost a lot such as airplane tickets. The most important thing to remember with a credit card though is that it is borrowed money. Therefore, you should be careful and prudent in using it because you may be racking up a huge amount of debt without you knowing it. That is why for purposes of better financial management, experts advise using a debit card because it is as good as cash.

In the event that you may need cash, debit cards usually also double as an ATM card that you can use to withdraw money from your bank account. You may be able to withdraw money also using your credit card from an ATM machine but beware that this usually comes with very high fees, especially if you use it abroad—not to mention that again, such money will come at an interest rate because it is loaned.

Both Types of Cards Are Useful

In case you are thinking of getting a debit card or a credit card, the answer may be both. Each type of payment card provides its own unique advantages so it may be good to have each one handy. One thing is for sure in that overall financial smarts are needed so that you can enjoy your money wisely. Always treat your cards as if they were cash, and keep them in a secure place. It would be good to keep a record of your card numbers and expiration dates so that you may report and replace them in case they get lost or stolen. However, keep security information such as your PIN separate to prevent easy access to your funds.

As technology continues to evolve, it truly shapes society as well through the way we handle money. Payment cards will definitely be a part of the future of finances and it is important that you don’t get left behind.


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