According to YouGov, 73% of Singaporeans own at least one credit card. But only a few of them are indebted to it. A whopping 88% settle their balances on time, 9% pay them partially, and only 3% pay off the minimum amount. Clearly, Singaporeans are not fond of accumulating debt.
But when it comes to traveling, cardholders are rather eager to use up their credit. YouGov found that travel tickets are the most commonly bought item via credit card (81%), followed by accommodation (76%). In terms of weekly usage, YouGov’s survey gathered that 37% of Singaporean cardholders spend their credits several times a week.
Yet, more than half of Singaporeans believe that credit cards promote excessive spending.
Without a doubt, owning a credit card tempts you to spend what you can’t afford. But that might not be a big problem for Singaporeans, who are a financially responsible bunch. They can own several credit cards and still be on top of their debts. But a few of them are still against credit, especially for shopping online.
Using a credit card for online shopping indeed has ups and downs, but for the most part, it’s advantageous. Below are the reasons Singaporeans shouldn’t hesitate to shop online with credit:
1. Credit Cards are More Secure
Many people, not just in Singapore but around the world, think that credit cards are easily hacked. While security breaches indeed remain a threat in many banking companies, credit card users can protect their information from theft.
Enroll your account in online or mobile banking so that you can keep track of your credit card transactions. That way, you don’t have to wait for your monthly bank statement to see if your credit card has been used. Instead, you can check your online or mobile banking account anytime, and immediately report an unauthorized transaction.
Alternatively, your credit card can also protect your purchases. For example, if you bought a laptop online for its regular price, then the same laptop gets a discount a few days later, your credit card can cover you for the sale price instead of the one you paid.
However, that there are limitations in every card’s protective features, so contact your card provider to find out what yours can offer.
2. Credit Cards Allow You to Dispute a Transaction
The ability to dispute transactions proves that credit cards are more secure than people believe. If you ordered an item online and the seller doesn’t deliver it, or the seller turns out to be a fraud, you can contact your provider and reverse the transaction. Though you can also reverse a debit card transaction, it’s more convenient in credit cards, because your money won’t actually move.
3. Credit Cards Offer Rewards and Other Irresistible Perks
Many credit card companies offer rewards and other perks when you shop from particular brands. Examples of these rewards and perks include:
- Air Travel Miles — When you buy tickets from a specific airline, your credit card can give you miles, which you can apply against travel-related expenses, such as accommodation.
- Cash-back — When you buy groceries or fill up your tank using your card regularly, you can get a small percentage of your money back at the end of the year.
- Zero Interest — If you get a new credit card, you can enjoy zero interest on your first purchases.
- Discounts or Gift Cards — Some online stores, both local and international, can cut down their prices if you use your credit card, or offer a gift with your purchase.
4. You’re Safer When Someone Steals Your Credit Card Number Than Your Debit Card Number
A stolen credit card number turns out to be less of a threat than a stolen debit card number. That’s because you can report unauthorized credit card purchases right after it’s done. Debit card transactions, on the other hand, are harder to impede, because when someone steals your debit card number, they can drain out your money in a flash. Reversing the transaction can take weeks.
A thief may still be able to use your credit card, but at least, they won’t be touching the money in your bank account. That can definitely offer you more peace of mind than relying on your debit card alone.
When Not to Use Your Credit Card
Although credit cards offer superb convenience and security, there are situations wherein they’re not recommended. One of those situations is shopping from small businesses. Credit cards are more expensive to small-time merchants, so they may impose a minimum spend for them or reject them altogether.
Cash and debit are still essential, but be wise in using them. The moment you hear or see rewards, take it as a sign that using your credit card makes more financial sense. But still, spend your credit in moderation. Avoid using up your maximum limit, or you may risk losing rights to your credit card.