DEBT CARD DANGERS IN SINGAPORE AND ABROAD

We’re very much flag-bearers for the convenience of credit cards. Credit card use in Singapore is a way of life, and we have a market like nowhere in the world where premium card holders get the best deals, the lowest rates, and superb card-holder offers.  We’re also well aware that credit cards may not be the only plastic in your wallet, with many people also using ATM cards and debit cards as part of their everyday financial lives.

But did you know that each of these ways of handling money come with their own dangers? We’ve covered the potential downside of credit card use at length before, and came to the conclusion that with a few simple safeguards – being aware of how your card works being the biggest deal – that credit card use in Singapore is just about the safest and most secure in the world.

So, what’s the deal with Debit Cards? Surely, they’re more or less the same as credit cards, only the transaction is applied directly to your bank account? That’s true, and this link – often with the Visa or Mastercard branding that allows global recognition – comes with its own dangers.

For a start, you can safely assume that your credit card is a “ring-fenced” part of your financial life. If you keep an eye on your transactions, and keep paying off the balance every month, then it is the easiest thing to keep to budget. With a debit card, there’s always the risk of financial disaster. Take the eye off the ball, and you could easily find yourself overspent with nothing in the bank at a vital moment.

The same applies to fraud – your credit card is ring-fenced from your everyday banking, and will be guaranteed if fraud is proven. Fraudulent use on a debit card means all kinds of inconvenience, and could leave you out of pocket and unable to function for days or weeks at a time. With most debit card still relying on magnetic strip technology rather than the newer and more secure chips, the risk is significant enough to remain a worry.

What credit cards offer above debit cards, then, is security. With a credit card, the lender has your back and you can keep an eye on your transactions with ease.

Article by Jason Taylor – [email protected]