Best Payment Methods in Singapore! Pay Your Bill by Cash or Credit Card

Cash vs. Credit Card: Does it really matters how you pay?

How many of you have a parent or spouse who freaks out every time you mention using a credit card? They’ll argue about unnecessary debt, buying within your means, credit card fraud, and try their level best to deter you from using the credit card and insist on paying with cash or with a debit card(find more about Credit card V/s Debit card). Sometimes you are convinced the credit card is your biggest bane in life. A study by Dun & Bradstreet a few years ago found that people end up spending more money than required when using credit cards. So your well-wishers’ fears are not ill-founded. But there is no reason your case should become representative of credit card over-spending, because you are about to read an article that will help you make the best decision on when to use cash (or debit card) and when to use a credit card.

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Buying With Cash:

Cash (or debit card) is easy to keep track of in Singapore. If you’ve withdrawn S$300 from the ATM at the beginning of the month, you would be checking your wallet at least twice a day to see how much you have left. Each time you swipe your debit card, you get an SMS alert that lets you know how much money remains in your account. So you know where your cash is being spent, and you will watch the wallet (or the phone) to avoid a bankrupt day till the next payday.

Using cash means you never spend more than you have. You will not make impulsive purchases unless you can afford it, and you will make a budget for the month to utilise just the money you have, perhaps even try to save some for a rainy day.

Buying With Credit Card:

Credit cards are difficult to keep track of, unless you’re this super-careful person who keeps a tab on their spending every day and logs it in a diary or on an excel sheet (or if you use a budget management app on your smartphone). You only know your spending for the month when the bill arrives in your email. Credit cards make it easier to make impulsive purchases, over-spend when you are in a shop (or website) with a massive sale or buy items beyond what you can afford, because the money is not going from your account. You tend to forget that credit card is a form of loan and you have to pay interest on how much you spend.

So… Cash Or Credit Card?

Really, this depends on your personality and your circumstances. Personality, because if you are an impulsive shopper, not good at money management, or can’t remember to pay your bills, then credit cards will land you in trouble. Circumstances, because sometimes you cannot buy everything you need with the cash you have – for example, kitchen appliances, furniture, air conditioner, new clothes for an entire family of 6, etc. When needs are greater than your bank balance, but not so heavy that you cannot clear the bills for a few years, then credit cards come as a boon.

So here’s what you should never forget about credit cards: they are a short-term loan to help you manage your finances while making big purchases, NOT your go-to card for spending. Let me tell you the motto I use when deciding on whether to use cash or card: For small, everyday purchases, use cash or debit card. If you have a credit card that gives reward points and cashbacks on your regular monthly purchases, then go ahead and use it, but remember to pay off the full bill at the end of the month. If you’re sure you can pay the full or more than 50% of the card bill every month, or that you’ll be able to clear the dues within 6 months at the most, then use the credit card. If your income is not going to help you afford an item in the next 1 year, then don’t buy it even with a credit card.