3 Reasons Why You Should Use Your Credit Cards for Everyday Purchases


There’s nothing wrong with being cautious about your credit card usage. Caution shows that you’re responsible and careful enough to avoid many of the dangerous credit card mistakes that land many others in debt. 

However, being too cautious about using your credit cards for everyday purchases can be a real waste – especially if you’re paying annual fees of up to S$300+ for rewards that you hardly use.

After all, what’s the point in having credit cards if you can’t maximise your benefits through regular and sensible usage, right?

Here are 3 key reasons why it’s smart to use credit cards for everyday purchases:

#1: You won’t miss out on great credit card rewards

Let’s be honest, rewards and benefits are the primary reasons for having a credit card in the first place.  After all, when you compare a dollar spent on credit versus a dollar spent with cash – credit wins most of the time.

That’s because unlike cash, every dollar you spend with credit earns you rewards such as:

  • Frequent flyer miles: Depending on your credit card’s air miles programme, you can easily earn up to 4x air miles for every S$1 you spend. (Tip: Here’s how you can maximise the value of your KrisFlyer Miles).
  • Travel discounts: A good travel credit card will help you accumulate air miles and earn discounts on flight and hotel bookings while offering FREE travel insurance. (Tip: Check out which 3 travel credit cards every serious traveller needs).
  • Petrol discounts: Credit cards with petrol discounts can easily save you 14% to 19% on fuel purchased from selected stations.
  • Shopping rewards/discounts: Credit cards with shopping rewards and discounts of up to 40% at your favorite retail shops. (Tip: Check out our article on the 3 rewards credit card worth having).
  • Entertainment rewards/discounts: Dining and socialising in Singapore isn’t cheap, but having a good entertainment rewards/discount credit card can make it much more affordable. (Tip: Check out our article on the 3 entertainment credit cards worth having).

To maximise your credit card benefits, you need to have credit cards that fit your spending habits and lifestyle. Looking for a perfect credit card match doesn’t have to be difficult. Just use iMoney’s credit card comparison page to evaluate and choose the right cards for your needs.

The only way to take full advantage of  your credit card benefits is the use them regularly. As long as you make purchases within your financial means and make your repayments on time, you’re safe from the debt trap.

#2: You’ll build up your credit score faster

Your credit score has a tremendous effect on your financial health, especially when it comes to applying for loans and other financial products. The higher your credit score is – the more likely you are to receive the best interest rates when it comes to home loans, car loans and home loan refinancing.  

Having credit cards is a great way to build up your credit score – if you use them regularly and responsibly.

If you want to build up your credit score faster by making everyday purchases, you’ll need to do the following:

  • Utilising no more than 30% of your credit limit: A credit utilisation ratio of 30% is the magic number when it comes to how much credit you should be using on your cards. For example, if you have a S$10,000 limit, carrying a balance of no more than S$3,000 every month and making repayments on time will improve your credit score.
  • Spread your credit card usage evenly: Carrying a large balance on one of your credit card, which you pay off every month, can still reflect poorly on your credit score. So spread your credit card usage evenly. For example, let’s say you have three credit cards with limits of S$5,000 each. Instead of routinely charging S$3,000 on one of them, spread the balance between your other two cards so that each only carries a balance of S$1,000 (which keeps the credit utilisation ratio for each at 20%).

#3: You’ll appreciate the safety and convenience

The benefit you’ll probably appreciate immediately from using your credit cards for everyday purchases is convenience. Instead of wasting time fumbling for S$2 bills or S$0.05 cent coins, you can be in and out of the checkout queue in a minute or less.

True, you can do the same with “cash” in the form of debit cards. But going back to reason #1 above – you won’t receive any rewards or benefits for using cash.

Finally, another great feature of credit cards is the safety factor – especially if you travel regularly overseas. If you get robbed of your cash overseas, it’s gone forever most likely. But if you get robbed of your credit cards, you can always cancel them and dispute any fraudulent charges

By using your credit cards regularly according to the tips above, you’ll build up your credit score and benefit from the rewards programmes you pay to use every year through your annual fees.

Don’t forget – using your credit cards for everyday purchases doesn’t mean maxing out your credit. It simply means using your cards for purchases you would normally make with cash.


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