SG Budget Babe
Asked on 02 Dec 2019
Do credit cards really live up to the hype?
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.
Top Contributor (Dec)
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.
Top Contributor (Dec)
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.
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.
Top Contributor (Dec)
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
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.
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.
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!
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!
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.
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).
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! :)
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.
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!
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
online promotion- many cards give discounts for spending at Qoo10, Lazada, Shopee and other websites
F&B- dine at here, use XXX bank credit card, get free dessert or 10% off etc etc
Petrol- extra discount just by using an associated credit card. Its EXTRA LOWER PRICING for the petrol just by using a CC instead
free lower pricing for a lot of items by using cc
free cashback or FREE MILES just by spending.
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.
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.
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.
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