Addressing the Myths Surrounding Singapore Credit Cards

Addressing the Myths Surrounding Singapore Credit Cards

Do you own a credit card?

If you do, do you know everything there is to know about it? If you don’t, don’t worry. Some people still do not know everything about their credit cards even if they have been using it for a long time. Some don’t even know it comes with extra features that they can use for certain services.

However, there is a danger if you do not know everything about credit cards. Sometimes, you may find yourself believing a rumor and shake your trust with your credit card.

Before you go believing in these rumors and lament on closing your credit card, here are some of the myths that you should know about your credit cards and why these myths shouldn’t be believed in.

Debit Cards Vs. Credit Cards

Many people would immediately say you shouldn’t get a credit card because of the many bad things that can go wrong when using it, like credit card fraud, hidden charges, and other similar problems. They would even advise you to get a debit card instead since it is safe than credit cards.

However, credit cards come with more advantages than debit cards.

While debit cards do not come with an annual fee, it directly deducts the amount you use in your bank account. The more you use your debit card, the more your bank account decreases and the more it is at risk of being closed by accident. One’s credit rating can be affected by closed bank accounts, so debit cards can be detrimental to your credit history. Continuous use of debit cards also does not assist in building a credit history.

Meanwhile, credit cards do come with an annual fee, but when you use it, you don’t harm your bank balance since you are just temporarily borrowing money to pay the item immediately. As long as you use it properly and pay regularly, credit cards will help you build your credit history and show you are a regular payer.

When you try applying to loans, lenders will look into your credit history to see how well you paid your bills and credit cards and use it as the basis for the amount you can borrow.

Credit Card Balance Can Help Build Credit Rating

Many people believe that it is ok to have some balance in their credit cards. However, this should not be your practice when you have a credit card.

Having a remaining balance on your card and not paying it can affect your credit score. It will tell a moneylender if you are planning to apply for a personal loan in loan advisor, that you are a poor borrower because you always leave a balance hanging.

If you are not able to pay your balances in full, at least pay a part of your due, ideally more than the minimum amount specified, before your due date comes.

Keep One Credit Card

Many movies, advertisements and even shows often show people who have a lot of credit cards go into debt. However, it depends on every person on how well they will use their cards and if they have a strategy to pay for all of them without missing a due date.

Determine where you will use the cards for and how you can plan your payment scheme for all your cards. If you believe you can handle multiple cards, go for it.

If you do keep multiple cards, some of them offer rewards and cashback if you earn points as you use and pay regularly.

Your Credit Score Decreases When You Get a Credit Card

While it is true that new credit cards do deduct points from your credit score, the deduction is not that huge.

In Singapore, the deductions on credit history by new credit cards are only 5 points. If the card does make a problem with your credit score, just get a secured card since it would help you rebuild credit scores without worries.

Do not agree to offers of credit limit increase

Most banks would offer credit limit increases for some of their clientele who have proven they have used their credit cards wisely. However, some would say these are tricks and there is a catch once the credit limit increases.

There may be a catch with the credit card limit increases. However, you can also use that credit limit increase to your advantage based on your needs.


If you are still a bit scared about your credit cards, you can look into other alternatives that you can use when you do need money: from borrowing money from a relative or seeking out personal loans from a bank or a moneylender.

When you apply for a personal loan, you can identify how much you need to borrow, submit your requirements and wait for the approval of your chosen moneylender. Once it is approved, you can pay the personal loan off monthly or depend on your agreements.

What’s great with personal loans is the fact that the payment terms are longer than credit cards. In credit cards, you have to pay it immediately so you don’t incur high-interest rates.

Loans, on the other hand, will let you pay off how much you borrowed at a span of 3 to 5 years depending on your agreement with the lender. Loans also come with lower interest rates and they are quite constant, even if you are late in payments.

Consider Before Picking

Credit cards have their advantages and disadvantages, as well as misconceptions which you should look into before you believe it. While the disadvantages and the misconceptions can be scary, you don’t need to close your credit cards right away because you may need to use it in the long run.

If you want to lessen the load on your credit cards and the bills you pay each month, checking out alternatives would not hurt.

No matter which choice you make, just remember to think it through and prepare accordingly so you won’t get blindsided when it comes to paying your dues!

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