Is it wise/possible to survive without a credit card once you start working? - Seedly
 

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Asked by Perina C

Asked on 02 Dec 2019

Is it wise/possible to survive without a credit card once you start working?

Do credit cards really live up to the hype?

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Answers (42)

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Kelvin Seetoh
Kelvin Seetoh, Founder at Kelvestor.com
Level 6. Master
Answered on 02 Dec 2019

Definitely so.

However, I find that there are so many downsides when we do not use credit cards.

There are so many rebates and promotions going on. As an investor, I also studied how Visa/Masters work and the interchange fees they pass it back to the banks.

For merchants, they are charged a 2-3% fee by Visa/Masters. In order to maintain profits, merchants tend to levy it on the consumers by raising the prices.

Henceforth, the rebates you get are actually from your own expenses.

Just set automatic deduction or GIRO to your credit card and you'll be fine. Or set reminders on your phone.

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Kelvin Seetoh
Kelvin Seetoh

03 Dec 2019

Yes, Andy. Money goes to the bank and the bank gets to keep it.
Simon Soh
Simon Soh

03 Dec 2019

I was thinking the same Andy ! Thanks for giving some clarity on the topic Kelvin =)

I'm still a credit card virgin. Debit cards has been sufficient for me, and now with Grabpay and Grabpay Mastercard, I don't see the huge requirement for a credit card.

Though they come with good perks in the form of cashback and miles, and also additional services like balance transfers, interest-free installment plans, etc, they're just miscellaneous and you can live without.

I can handle my money well enough and even still, I don't like the idea of credit.

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Hi Perina,

Totally possible, but not recommended.

If you know how to maximize the benefits that credit cards bring to the table, then you are looking at a lot of value in having one. Sure, it does require a bit of homework, especially on miles card, but I wil quote my example of quadruple dipping to hopefully let you see what I mean:

Person A buys a couple of LJS meals at a CapitaMall. Spends $30 in cash. Goes home and eats.

Person B buys a couple of LJS meals at a CapitaMall. Pays with Favepay linked to Grab, earning 5% cash on Fave, Grab points, 120 miles from topping up grab balance with an eligible Credit Card, and 225 Capital$ for scanning their receipt under the CapitaMall loyalty program. Goes home and eats.

So you can see, by purely using cash, you leave a lot of value on the table. It's really recommended that if you can pay off your bills on time and track your spending and optimize it, you can definitely maximize what credit cards have to offer.

Merchants are already conditioned to take cards as a payment method. Just like how NETS levies a fee on the merchants, the payment networks do as well. That's why sometimes when you buy computer parts, merchants ask if you can pay by cash, because of the profit margins that they lose when you pay by NETS or even card. For merchants who don't do that, they've build in these margins into their pricing. You're effectively subsidizing others if you pay by cash in these instances.

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Kenneth Lou
Kenneth Lou

03 Dec 2019

Hello Zhen! U can use AMEX Krisflyer. That will get you miles for your topup up to $200!
Zhen
Zhen

15 Dec 2019

Hi Kenneth, is that the only card that counts GrabPay top up? I'll also look for more about this card. :) Thank you!
Bjorn Ng
Bjorn Ng
Top Contributor

Top Contributor (Dec)

Level 9. God of Wisdom
Answered on 12 Dec 2019

Definitely possible to survive. But you will be giving up a lot of perks that credit cards provide. However, with that said, I would only suggest you to use a credit card if you are sure you can control and limit your spending, and pay your bills on time, because if you don't, that is where you will get slapped with a 20%/annum interest fee.

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Whether you use credit card or cash (or nets), the price is the same.

spending cash gets you nothing.

spending credit card either gets you

  • cash back

  • miles

  • or extra discounts just for using credit card

For example, if you use credit card, you get additional discount on petrol spend. I call it a poor man tax on motorist that do not have credit card.

You get extra discount on dining too if you use a preferred credit card.

So credit card is a good must to avoid the poor man tax.

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Wallace Chai
Wallace Chai
Top Contributor

Top Contributor (Dec)

Level 9. God of Wisdom
Answered on 04 Dec 2019

Possible. But it would make more sense if you have CC. Can enjoy lots of rebates and cash back. But must be cautious too. Do not overspend. If you are the kind of love to spend and do not keep track of your spending, i suggest dont go for CC.

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Yanisa Koh
Yanisa Koh
Level 6. Master
Answered on 04 Dec 2019

Hi Perina, it is of course possible to survive without a credit card, whether you are working or not. Even for online purchases there are alternative options to pay.

However, there are many benefits to getting credit cards. Many cards have good promotions and tie ups with merchants, and some give you good rewards like cashback, points or miles. These can help you get more bang for your buck. However, you have to be very conscious not to spend over your budget, and make sure that you pay on time. These 2 things are not very difficult to do!

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 8. Wizard
Answered on 03 Dec 2019

Possible to survive without credit card ? Certainly, use Debit card and Cash! :) Or Top up credit card like YouTrip master card/ Revolute card and you can first top up before using them, they it will works like Debit card too!

Is it wise ? No. Because with credit card, you just need to :

1) Make sure you keep the $ and repay them fully before or when the bill comes.

2) Spending on Credit card gets cash back or miles get travellers to redeem full or part of the ticket. Unfortunately, cash back dwindle in the last 2 to 3 years, so everyone now mostly focus on miles card.

3) Interested in how to earn cash back or miles ? check out the seedly blog pages in the main website more and this Q&A to learn and ask questions.

All the best. Cheers!

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Aik Kai
Aik Kai
Level 7. Grand Master
Answered on 03 Dec 2019

Of course it is possible! Cash is still king, despite what people say. Add a debit card to your wallet and you are ready to roll. Cash for point-of-sale transactions and debit card for app and online transactions.

Credit card, in a nutshell, is a double edge sword. Used properly and you reap rewards that banks lie on the table. Used improperly and debts are no joke, potentially spoiling your future to some degree.

All in all, it depends on how you approach money. If you are those disciplined type, I would say you miss out by not getting credit cards. Cashback, miles, points.. all these rewards that you can reap. Will be a pity to let them go.

If you are those spend whatever you have, cash and debit card will be better. At least you don't get into unnecessary debts and/or stress over money.

Cheers!

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Eveline Lau
Eveline Lau
Level 6. Master
Updated on 13 Dec 2019

Possible to survive without a credit card. Wise? It depends. If you're a spendthrift, it may be wiser to avoid credit card. If you have the maturity to control your spending well, yet you're not having credit cards, you're missing out on the benefits (cashback, miles).

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Yong Kah Hwee
Yong Kah Hwee
Level 8. Wizard
Answered on 03 Dec 2019

It is definitely possible. Whether it is wise or not depends on the following:

If you are able to control your spendings and ensure that you pay your bills on time, then it is definitely unwise to not use a credit card. Using a credit card can give you benefits such cashback, miles and reward points, which you can then exchange for flight tickets, vouchers, etc. Using a credit card also allows the money to stay in your bank for a long period of time (until you pay your CC bills), thus allowing you to get more interest if you're using a high interest savings account.

On the other hand, if you are unable to control your savings, then it is unwise to get a credit card. However, I believe that with some self discipline, anyone will be able to control their spendings! :)

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Of course it is possible to survive. Credit cards are relatively new in grand scheme of things (since the 1970s or so; so about 50 years whereas stocks have been around for hundreds of years).

If you undisciplined (spend too easily) then you will pay heavy interest/fees so maybe best without it but with the right spend/payment patterns you get gains from the promos so generally should take on the cards once ready.​​​

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Junus Eu
Junus Eu
Top Contributor

Top Contributor (Dec)

Level 9. God of Wisdom
Answered on 02 Dec 2019

Definitely - I know a few who don't use credit cards.

That said, if one can pay monthly payments on time, I would say to use select credit cards to get the rebates/promotions/miles/cashback!

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Choon Yuan Chan
Choon Yuan Chan

03 Dec 2019

However sadly, they lose all the credit card cashback rewards if they can pay their bills on time
Keith Ng
Keith Ng
Level 5. Genius
Answered on 19 Dec 2019

Watch this: https://www.youtube.com/watch?v=8Aj8STdGMvU

Credit card also provide credit protection, which debit cards do not. I managed to chargeback and got back my deposit when Obike closed down.

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Angeline Teo
Angeline Teo, Calculator at The Internet
Level 5. Genius
Answered on 16 Dec 2019

Yes it is possible to survive without credit card, but why would you not use a credit card that does not incur you extra fees (assuming you pay up monthly, no interest fee, no membership fees)

There are so many extra discounts associated with cards

  1. online promotion- many cards give discounts for spending at Qoo10, Lazada, Shopee and other websites

  2. F&B- dine at here, use XXX bank credit card, get free dessert or 10% off etc etc

  3. Petrol- extra discount just by using an associated credit card. Its EXTRA LOWER PRICING for the petrol just by using a CC instead

  4. free lower pricing for a lot of items by using cc

  5. free cashback or FREE MILES just by spending.

  6. free goodies or vouchers from the bank for reaching their spending target monthly (don't do it for the goodies.. just enjoy the goodies if u happen to spend that amount)

Credit card spending is unfair... to those without it.

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John Smiths
John Smiths, Tax at Local bank in Singapore
Level 5. Genius
Answered on 12 Dec 2019

The miles or rebates you earn on credit card spending can be useful. As long you learn how to control and manage your credit card spending well. It's a good test of your ability to manage your own personal finances.

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Hi Perina, it is possible to survive without a credit card, you can easily replace the use of a credit card with a debit card.

First rule, is not to overspend on credit cards.

Once you understand that, then let me share with you the benefits of using credit cards. Many cards have good promotions or tie ups with different merchants, and some give you good rewards like cashback, vouchers or miles.

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A
Angie
Level 3. Wonderkid
Answered on 10 Dec 2019

It is possible but it wouldn't be a very smart choice. As credit card can let you enjoy lot of stuff like cashback/rebates and promos. It would be a waste to miss out all these!

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S
Sheena
Level 4. Prodigy
Answered on 10 Dec 2019

It is possible to survive without a CC because that's what I have been doing for 3 years.

But after reading all the answers below, i guess it may not be wise given all the cashbacks/miles you can earn with it. just remember to pay your CC bills on time! :P

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SW
Shaun Wq Lim
Level 6. Master
Answered on 09 Dec 2019

I believe the importance of the credit score demonstrated by the track record and usage of credit cards should be the focus.

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