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Credit vs debit: Which card should you use?

A credit card comes with plenty of perks but a debit card won't offer you any of that. Yet, many consumers think debit is safer because credit equates caution.

SINGAPORE: You've got a credit card and a debit card.

Does it really matter how you use each card for your daily expenses? And does it really make a difference if you only relied on one?

Not really, according to experts.

A credit card comes with plenty of perks such as rewards, rebates and discounts. On the contrary, a debit card won't offer you any of that.

Yet, many consumers think debit is safer because credit equates caution.

Experts disagree.

If you use a debit card, the amount will automatically be deducted from your account but if you use a credit card, all you have to do is pay your credit card bill off by the end of the month and there won’t be any difference.

For those with a less rosy relationship with money, scratching credit may seem like a good idea but that could be a problem with bigger payments.

Peklyn Teo, principal financial consultant at Finance Made Simple, said: "It won't be so much of a disadvantage, but I would say that sometimes it could be a bit more troublesome.

"Like hospital admission, sometimes you need to pay those type of bills come in the tens and thousands, and if you don't have a credit card but you just have a debit card, or you don’t have a check book, it's just more troublesome to get a cashless order where I can withdraw that kind of money just to pay those type of bills."

The limit on debit card charges can be as low as $2,000. This means that even booking a flight could be a hassle.

But at the end of the day, the bank will stick it to you if you fail to pay your bill on time.

And if you can't master that, then your spending habits may cost a lot more than the rebates on your next credit bill.

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