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why CREDIT cards benefits much better than DEBIT cards?

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Old 27-12-2017, 05:29 PM   #1
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Question why CREDIT cards benefits much better than DEBIT cards?

dear experts

anyone knows why CREDIT cards benefits are much better than DEBIT cards?

is it because banks earn more from merchants when credit cards are used?

please enlighten me.
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Old 27-12-2017, 05:31 PM   #2
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Banks hope that people get used to buying stuff on credit so that they can charge interest.

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Old 27-12-2017, 06:37 PM   #3
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when you don't see your bank balance ( the one you post your salary to) drop whenever you get something on your hand - instant gratification. and you have 5 x your monthly salary as credit limit.

eventually will lead to overspend and possibility late payment, the bank are banking on out of a 1000 spender, 10% will come with late payment charges and they earn from the 24% p.a

in order to entice the group of overspender, they come up with more benefit hoping that you will max your credit limit and unable to pay full.
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Last edited by BigMonkey; 27-12-2017 at 06:40 PM..
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Old 27-12-2017, 06:38 PM   #4
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Banks hope that people get used to buying stuff on credit so that they can charge interest.

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there are 0% installment plan, the bank will earn from the merchant only when they tie up together
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Old 27-12-2017, 07:01 PM   #5
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dear experts

anyone knows why CREDIT cards benefits are much better than DEBIT cards?

is it because banks earn more from merchants when credit cards are used?

please enlighten me.
Credit cards can earn from late fees, interest fees while debit cards got nothing. Which is better for banks?
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Old 27-12-2017, 07:11 PM   #6
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In no particular order:

1. Merchant transaction fees are higher with credit cards.

2. Some credit card holders pay high interest rates and late payment penalties.

3. Credit card annual fees.

4. Credit card holders tend to spend more on their cards than debit card holders.

However, DBS/POSB's current 5% rebate promotion with their DBS Visa Debit Card is rather nice, if you can take advantage of it. That's a credit card-like promotion. DBS/POSB also has a pretty good 3% rebate promotion on the POSB PAssion Debit Card, for medical expenses, and if you open a Child Development Account with DBS/POSB. Citibank's Tap and Save debit MasterCard is also rather good (1% flat rebate on the whole monthly spending cap of $10,000, and 2% back on EZ-Link payments with the card), assuming you can meet Citibank's steep $15,000 total relationship balance requirement to avoid monthly fees. (Standard Chartered has/had a similar debit card, but it's less attractive.) So there are some reasonable debit card deals out there, if you look hard enough.

You can also almost always get the same merchant discounts with debit cards, such as the "Use your UOB card to get 15% off at Restaurant Q, weekdays only" promotions. Most of those merchant promotions in Singapore help separate local resident customers from foreign tourists, offering a lower price to the locals for their off-peak custom. Debit cards are fine for that, unless the promotion terms and conditions specifically say otherwise. You can look through your debit card bank's list of merchant promotions to see if any interest you. Those promotions will be listed in the credit card section of their Web site (or mobile site), but about 99% of the time you don't actually need a credit card -- just any payment card from that bank.

Last edited by BBCWatcher; 27-12-2017 at 07:21 PM..
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