Credit & Loan

Is Owning A Credit Card For Necessary You?

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Weigh the advantages and disadvantages of owning a credit card, before signing up for one!


Here are some of the convincing points that highlight how useful owning a credit card is:

1. Practical for Globetrotters

Singaporeans desire to discover the world’s wonders beyond its concrete jungle. As travelling became increasingly convenient nowadays, there are several options for payment. One is through credit. There are three primary reasons why travelling with a credit card is practical.

Firstly, travel arrangements such as room reservation and car rental are usually done with a credit or debit card. Secondly, it adds a proof of financial capacity when trying to acquire a Multiple Entry Visa in some countries. Lastly, there is a sense of relief to know that you always have access to emergency funds while travelling.

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2. Protection against Crooks

I was once robbed when I was young. I let my guards down as I was accompanied by my friend. After watching a fantastic film, I noticed that my wallet was missing. My friend and I frantically searched for it for hours. I even left my contact details to the cinema staff, but I had no luck! I had to accept that a decent amount of cash was gone. The unfortunate ordeal applies to my house keys as well as my debit card. To prevent identity theft, I had to immediately contact my bank. The process took two days.

If I only carried a credit card, the gravity of the situation may lessen. Credit cards are not tangible as cash. It is also not linked to your savings account. Many establishments ask for further identification for significant purchases. Furthermore, you can simply report a lost card thru a phone call.

3. Essential for Good Credit Report

Gone are the days when you solely think about budgeting your allowance. Welcome to the adult world whereby property owners and automotive establishments judge you by your credit report. Some of the best interest rates are offered to the people who carry impressive credit report.

It takes no genius to realize that using your credit card sensibly builds a good credit report. If you are suffering from a bad one, it is time to rehabilitate through a realistic financial plan.


Here are some of the convincing points that highlight how owning a credit card is a recipe for disaster:

1. Tempting for Impulsive Buyers

Whether you believe it or not, we all have a control over our shopping habits. You can either be a frugal shopper who regularly reads consumer reviews or an impulsive shopper who regularly submits to tempting offers. For a person who has a difficult time in resisting a purchase, equipping yourself with a credit card may be harmful for your finances.

Using a credit card diminishes the sense of awareness as you are spending the money that you do not have. You are likely to shop based on your wants than on its costs. On the other hand, shopping with cash may allow to contemplate about your purchase. You buy what you can only afford to pay for now.

2. Solely for Smaller Purchases

If your primary purpose for owning a credit card is to cover your fondness for retail therapy, owning a credit card is not necessary. It is a good idea to save up for purchases costing S$250 or less. The delayed gratification allows you to contemplate about the coveted product.

Swiping a credit card is helpful for bigger purchases that you want to pay in several chunks such as purchasing a new laptop as well as financing your child’s education.

3. Unnecessary for Savvy Planners

One of the famous tests involving Typology highlights the dichotomous nature of people who are calculated and people who are spontaneous. The latter plans out several areas of their lives before jumping into a decision. While, the former enthusiastically goes with the flow.

I, for one, plan out my entire budget for the month as well as the funds that will go to savings and the emergency fund. Setting up an emergency fund entails keeping at least 6 months’ worth of your salary. If you have a strong emergency fund, it is unnecessary to have a credit card for emergencies.

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Sources: 1 & 2

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