Cash or credit: Which is better?
In the previous generation, the answer was simple—cash was king. Back then, nothing could beat the reliability of cold, hard cash. But in today’s digital world, that’s no longer the case. In fact, many other payment methods now offer greater advantages over cash.
Take credit cards, for example. In Singapore, paying with almost any credit card is generally more beneficial than using cash. Beyond the convenience of card payments, credit cards offer perks such as cashback, miles or reward points—benefits you wouldn’t enjoy if you paid in cash.
Additionally, using a credit card allows you to defer payment. While this may not make a huge difference for everyday purchases, it does give you the flexibility to enjoy what you buy today while settling the bill later at no additional cost.
But what if we swapped our cash for LifeSG credits and CDC vouchers instead? Should we still choose to use our credit cards when we could have paid using LifeSG credits or CDC vouchers?
The Argument For Using Credit Cards
The same logic applies to choosing credit cards over cash when deciding whether to use our LifeSG credits or CDC vouchers. By opting to pay with a credit card instead, we maximise additional perks like cashback, miles, and reward points—benefits we miss out on when using vouchers.
While it’s tempting to think of LifeSG credits or CDC vouchers as “free money,” a more strategic approach would be to save them for situations where credit cards aren’t accepted. This way, you can still earn credit card rewards on eligible transactions while reserving your vouchers for necessary purchases that don’t offer any added perks.
In short, the ideal payment priority should be:
1) Firstly, use your credit card first to maximise perks. 2) If credit card payment isn’t accepted, use LifeSG credits or CDC vouchers. 3) Only pay with cash as a last resort when neither option is available.
At this point, it’s important to highlight that while consumers don’t pay anything extra for using credit cards—in fact, we’re often incentivised with perks—merchants do bear a cost. Every time a credit card transaction is processed, the merchant pays a percentage of the transaction amount to the issuing bank as a fee.
This means that while credit cards benefit consumers, they also come with costs that businesses must account for when accepting card payments.
The Exception To The Rule
There are a few exceptions to the rule of prioritising credit card payments.
If your LifeSG credits or CDC vouchers are expiring soon. Unused vouchers have no value once they expire, so if they’re nearing their expiry date, it’s best to use them first rather than let them go to waste.
If you’re facing cash flow constraints. For families managing tight finances, immediate cash relief is more valuable than accumulating credit card perks. Using LifeSG credits or CDC vouchers can help ease financial pressure by reducing out-of-pocket expenses.
If you rarely shop at places that accept CDC vouchers. CDC vouchers are meant to be spent at heartland shops and hawker stalls. If you typically shop in malls or dine at restaurants that don’t accept CDC vouchers, there’s little reason to hold on to them. It’s like going to the arcade and having leftover tokens – if you’re not coming back anytime soon, you might as well finish using them while you can. LifeSG Credits, which are much more liquid as they can be used for payment at any online or physical merchants offering PayNow UEN QR or NETS QR, will be less of an issue.
Read Also: Guide To Redeeming And Using Your LifeSG Credits
The post Why You Should Only Use LifeSG Credits & CDC Vouchers When Credit Cards Payment Are Not Allowed appeared first on DollarsAndSense.sg.
