Budgeting | Personal Finance | Article
7 Ways You Stand To Benefit When You Use A Debit Card
by The Simple Sum Team | 19 Dec 2022 | 8 mins read
This article is brought to you by HSBC
Even long before the pandemic and the “era” of social distancing, we have been moving towards a more cashless lifestyle. It’s undeniable—more merchants and vendors are making their preference for e-payment methods and cards known, and anyway, tapping one’s card is much easier than rifling through a wallet for a bunch of notes and coins.
But it’s not just about convenience and hygiene. Going cashless and leaning on a debit card for everyday use has other advantages, such as:
1. Makes transacting easier
Nobody likes to hold up a queue, especially in Singapore. It’s far more convenient to complete a transaction with a single tap of your card. And nowadays, you don’t even have to whip out your card—just your phone. Pair your debit card with your mobile wallet and save a few more seconds, whether you’re waiting in line to pay for your food or commuting! If you’re the sort to lose your cards and keys, then this will ensure you always keep your debit card safe and on you.
2. It’s very budget-friendly
Debit cards don’t give you access to a line of credit, which means you won’t spend more money than you actually possess. Research by Marketing Letters has shown that people are twice as more willing to spend money when paying using a credit card. Hence, using a debit card instead of a credit card can help you rein in your tendencies to overspend.
This will save you the grief of dealing with exorbitant interest rates and late payment fees, especially if you forget to pay your bills on time4. Let’s try to minimise the amount of debt we have to work with and focus on sticking to our budget and savings goals.
3. Perks and rewards
Using cash will always get the job done, but using a debit card may give you more perks than cash can. You usually get a debit card when you apply for a savings account. So look for accounts that provide you a decent reward program for saving money in that account – either in the form of interest or cash back – and additional perks for spending on your debit card. Some even offer you a wide range of lifestyle and dining benefits, like deals and discounts at selected merchants and restaurants.
And we know—credit cards give you rewards as well. But if you want to be a disciplined spender, a debit card will ensure you spend within your means.
4. Save on online, foreign transactions
Those pesky foreign currency fees have got to go, especially where it concerns credit cards. Even if you’re earning 2% cashback on your purchases, credit cards will cause you to incur an additional 2% to 3% in foreign transaction fees. Do the math, because it means you’re essentially cancelling out whatever rewards you’re trying to get on your credit card! (Also, whatever you pay on foreign transaction fees may not be counted towards your total spend for rewards).
A debit card is the perfect workaround; when transacting with overseas merchants online, especially for your big-ticket purchases, a debit card with multi-currency features would be able to shield you from foreign transaction fees and give you access to forex rates that are more favourable. A little bit goes a long way, especially when it comes to saving money.
5. Constant access to your money in the bank, no matter where you are
With a multi-currency account and debit card, you won’t ever have to worry about running out of cash even if you’re gallivanting somewhere far, far away from home.
You’ll be able to withdraw cash from ATMs around the world with your debit card. Paired with a multicurrency account, where you get to store cash in different currencies, you potentially save on processing fees.
Furthermore, you can buy and store currencies ahead of your travel plans when the exchange rates are more favourable saving yourself a couple of hundred dollars on your future holidays.
6. Kiss merchant fees goodbye
Some retailers and merchants charge fees for credit card transactions, especially for online or overseas transactions like we mentioned above. For instance, some merchants may tack on an additional 3% to your purchase, which means that you’ll end up paying $103 for an item that costs $100. Some merchants may alert you to the fact that there’s an additional fee when transacting with a credit card, others may not.
In these cases, it makes more sense to pay with a debit card because it all adds up in the end, no matter how insignificant the extra charge may be at the time.
6. No annual fees4
Credit cards take commitment in the form of annual fees, unlike debit cards. Debit cards spare you the hassle of setting money aside for annual fees, which means that you won’t need to adhere to a minimum spend amount to avoid those fees in the first place. In fact, you don’t even have to worry about trying to work around annual fees, or picking up the phone to call the bank to waive them!
What’s the downside of having a debit card, again? It’s clear that debit cards are a spendthrift’s best friend, and the advantages are undeniable. From saving on foreign exchange fees to receiving rewards as you spend without having to worry about upkeeping it with an annual fee (and potentially getting into debt), debit cards are the way to go for a healthy and well-managed cashless lifestyle.
This content is sponsored by HSBC
– The HSBC Everyday Global Debit Card conveniently allows you to travel and pay like a local, whether you’re shopping in Singapore, buying from global merchants online, or being a globe-trotter.
– Enjoy $0 fee in 10 currencies for your retail purchase and cash withdrawal1,2
– Manage funds from your HSBC Everyday Global Account (EGA) and convert currencies at your preferred rate online or via the HSBC Singapore app
– Make contactless payments through Visa payWave and withdraw cash at millions of touch points globally
– Make secure purchases with mobile wallets such as Apple Pay anytime, anywhere
– Access some attractive promotions and deals with your Debit Card
The good thing about having your HSBC Everyday Global Debit Card is that it comes with an HSBC Everyday Global Account that allows you to take advantage of attractive exchange rates and store the foreign currencies in the account for withdrawal and usage.
For instance, while Credit Card A and Credit Card B below offers cashback or rewards on their overseas transactions, those rewards are effectively cancelled out by the foreign exchange transaction fees on the credit card.
Everyday Global Debit Card
|Credit Card A||Credit Card B|
|Cashback or Rewards||1.0% Cashback
Cash Back on eligible spends with HSBC Everyday+3
|Up to 10X Points
Overseas Spending Rewards
|2.5 % Cashback
Overseas Spending Rewards
(insert thumbs up or tick icon)
|$0 fee in 10 currencies for your retail purchase, online shopping1||~3.5 %
Foreign Transaction Fee
Foreign Transaction Fee
|Overseas Cash withdrawal
(insert thumbs up or tick icon)
|$0 fee on overseas cash withdrawal across all ATMs worldwide2||FX charges applies||FX charges applies|
Plus, earn up to S$800 in cashback and bonus interest each month when you qualify for HSBC Everyday+ Rewards Programme3
Apply for an HSBC Everyday Global Account and receive your HSBC Everyday Global Debit Card.
Terms and conditions apply.
1Applies to successful retail purchase, online shopping and cash withdrawal made via the 10 supported currencies. If you do not have sufficient foreign currencies to complete the transactions, we will convert the transaction at a prevailing rate as determined by the bank and bill you in Singapore dollar.
2HSBC Premier Everyday Global Debit Card Cardholders enjoy $0 HSBC ATM fees for overseas cash withdrawals across all ATMs worldwide.
HSBC Personal Banking Everyday Global Debit Card Cardholders enjoy $0 HSBC ATM fees for overseas cash withdrawal at all HSBC ATMs except in Argentina, France, Brazil, Greece, Malta, Mexico, New Zealand and Turkey.
HSBC Fees apply for cash withdrawals at non HSBC ATMs. Please note that for all customers, fees may be applied by the 3rd party banks for cash withdrawals at non-HSBC ATMs worldwide.
3Visit hsbc.com.sg/ega for more details on the HSBC Everyday+ Rewards Programme.
4HSBC Account Holders and Debit Card fees may apply. For further details, please refer to the HSBC Debit Card Cardholder’s Agreement, which can be found at this link
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.