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Why you should Opt for Credit Cards over Debit Cards

Over the last few decades as banks are encouraging people to go cashless, use of debit and credit cards has increased significantly. Both credit and debit cards are convenient while making transactions. However, as debit cards draw funds from your own account, you will not be able to build your credit score.

In contrast, if you use your credit cards wisely and pay your bills on time, it will be beneficial for you in the future. For instance, you will not face difficulty in borrowing money from lenders for fulfilling your personal needs.

Businessman using a credit card

Let us take a look at some more reasons why you should opt for credit cards over debit cards:

You can easily handle emergencies

If you need cash urgently, for example, to make alternative transport arrangements, a credit card is a much better tool instead of taking out cash from your own personal savings. With a credit card, you will be able to make emergency purchases on credit first. You can later repay the borrowed amount as per your convenience. Young professionals who have just started to make money, multiple credit cards let them get immediate access to a large pool of funds. This is ideal as long as they can manage those credit cards well.

You will improve your credit score

If you make consistent payments using your credit card, you can easily enhance your credit score. With debit cards, you will not be able to make any difference to your credit score as it is similar to issuing a cheque, which has no effect on your credit score as the cash is drawn from your account. With a good credit score, you can easily take loans in future, such as for a car or house.

You will collect rewards points and cashback

With most credit cards you are likely to get rewards on certain purchases. It is a way card companies entice users to spend more, but if you are careful, you can make the most of such rewards points. Some common rewards include cash back programs, air miles, promotional services, hotel credits and discount on fuel. Other cards provide points that you can accumulate and use for purchases in the future.

You will get interest-free loans

With most credit cards, interest is charged only on the unsettled balance after the payment due date. If you fail to pay the full bill before this due date, you will be charged a huge interest on the unpaid balances, which is normally close to 24% to 28% p.a. However, if you plan carefully and spend prudently, you will not have to worry about the interest because you will enjoy an interest-free period on your purchases. You will enjoy credit at no additional cost.

Business credit card

You will get immense purchasing power

With credit cards, you will be able to make a big purchase, like payment on a kitchen appliance, or book flight tickets. Large purchases can get you big rewards as well. If you are responsible, you will get an improved credit score and a superior credit limit, if you are on time with your bill payment.

A credit card is more secure than a debit card

Since a debit card deducts money from your account at the time of the transaction, it is very important that your card is protected from any fraudulent transaction. With a credit card, you can simply report the fraud by making a phone call and you will not have to pay for charges not made by you. Your credit is secure and intact.

On the other hand, with a debit card, you will be in a very bad situation. Your money in the account would be gone. The obligation would be on you to raise this matter with the bank and somehow get a refund.

The biggest test for card issuers has been to offer the most useful features on their cards to customers. Cardholders are clearly getting the benefit now as there are close to 8 million credit cards used by Singaporeans.

About author

Ivan Widjaya
Ivan Widjaya 2930 posts

Ivan Widjaya is the Owner/Editor of, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

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