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Credit Card vs Debit Card – Do Singaporeans Know The Differences?

With a wide array of bank cards in Singapore, many people may not know the exact differences between a credit card and debit card. They may look the same and function in similar ways but there are some key differences which could make one more suited to your spending pattern.

To help you GET more for your money, we at GET.com will give you a quick run-through of the main differences between a debit card and credit card.

What Is A Debit Card?

Most people in Singapore hold debit cards, simply because there is no minimum income requirement to apply for a debit card as long as you are at least 16 years old and have a savings account with the bank.

A debit card is linked to your bank account so when you make a purchase, the amount is deducted from your deposit account immediately. The transaction will be rejected if you do not have enough money in your account.

Therefore, having a debit card is perhaps best for those who are prone to overspending, as you can only spend the money you already have and cannot extend it by credit.

What Is A Credit Card?

Singaporeans hold an average of 6 credit cards each (see card circulation numbers here), so credit card use is very common here. The top reason why they are so popular here is because you can get discounts and deals when you use certain credit cards to pay for things, whether it's food or coffee or shopping.

So how is a credit card different from a debit card?

A credit card gives you the option to borrow money from the bank to make your purchases, whether you’re buying an air ticket to Europe or a cup of coffee.

You don’t pay interest as long as you pay back ALL the money you spent on your credit card within the 'grace period' of 25-30 days.

But if you are late in paying, the bank will charge an interest on the amount due, meaning you pay a certain percentage of the money you owe, plus the amount you borrowed.

Financial responsibility is important for credit card use as it is easy to overspend and get buried in a cycle of debt.

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To avoid late or missed payments of any of your credit card bills, this is what we at GET.com recommend you do:

Set up automatic Giro deduction from your bank account so that your monthly credit card bill payments are deducted automatically each month. We also strongly recommend that you pay the full payment, instead of the minimum payment each month. That way, you don't have to pay any interest or late fees.

If you are someone who will pay back whatever you’ve spent on your credit card on time and in full, you can fully maximize the benefits of a credit card, especially a cashback credit card or rewards credit card that gives you discounts and rewards whenever you use the card to pay.

Instead of checking each bank's brochure for deals and discounts at stores, restaurants, spas, kids' places and so on, you can now use a new mobile app that lists such offers and discounts from more than 10 banks in Singapore.

The GETdeals™ app has more than 2,300 deals displayed, according to the merchants' proximity to the user. You can get the GETdeals™ app directly from GET.com or get it on the App Store and Google Play.

To give you an overview of what debit and credit cards are, the related fees, and their pros and cons, you can look at the comparison table below:

This article was originally on the GET.com blog at: Credit Card vs Debit Card – Do Singaporeans Know The Differences?.

What do you think? Share your comments with us below!

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Find the best credit card discounts near you for dining, shopping, lifestyle and more. Download the free GETdeals™ App.

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