Credit cards are safe to use as long as you follow one simple rule

Last year, my husband and I flew from Singapore to New York in business class on Singapore Airlines. Friends assumed we had splurged. In reality, apart from about S$100 in airport taxes, we did not pay cash for the seats. The trip happened because we treated our cards like a financial tool, not a funding source. That distinction matters, especially at a time when more Singaporeans are comfortable tapping to pay for almost everything and headlines about rising rollover balances are easy to find.

Card use is already the norm here. Surveys show contactless adoption is high, and credit and charge cards now account for roughly two thirds of Singapore’s total card spend by value. The balance is mainly on debit. That split reflects more than convenience. Rewards, instalment options, and travel perks keep nudging everyday payments toward credit.

At the same time, the Monetary Authority of Singapore has highlighted a steady rise in credit card rollover balances. The central bank’s monthly statistical bulletin shows rollover balances climbing through 2024, with levels around S$7.9 billion in the third quarter before moving higher in subsequent releases. The picture is not one of a sweeping default cycle, but it is a reminder that the cost of carrying balances compounds quickly.

Regulators have signalled they are watching closely. In a Jan 9, 2025 letter responding to public calls for tougher curbs, MAS pointed to existing safeguards designed to limit over-indebtedness and to bank practices that intervene early when borrowers show signs of stress. The response did not dismiss the issue. It clarified that Singapore already runs with guardrails and that education, early engagement, and targeted measures remain the first line of defense.

So what does this mean if you are a working adult deciding whether to lean into cards or avoid them entirely? It helps to separate three questions. First, what do you actually gain from using a credit card for expenses you will make anyway. Second, how well are you protected if something goes wrong. Third, how do you avoid the debt trap that ruins the equation.

On the first, credit cards can increase the value you get from routine spending if you clear each bill in full. Groceries, insurance premiums, transit, utilities, and dining can convert into rebates or miles. You will see splashy numbers on marketing pages, but every high earn rate usually sits inside a monthly cap or a specific merchant list, which is why a steady S$600 supermarket bill can either shave a meaningful amount off your annual food budget or convert into a flight plan that did not feel possible with cash or debit alone. Perks sometimes go beyond cashback and miles. Issuers partner with events and retailers in ways that cash simply cannot match. UOB’s presale access for Taylor Swift’s Singapore shows in 2023 is a memorable example of cardholders getting in early before the general on-sale.

On the second, credit cards come with dispute and fraud frameworks that are stronger and more established than what most debit cards offer. If an unfamiliar transaction appears, your bank can lodge a dispute through scheme rules, and chargeback mechanisms exist to reverse qualifying transactions where goods do not arrive, are defective, or where the transaction is unauthorised. The Association of Banks in Singapore publishes guidance for consumers on how chargebacks and dispute resolution work, and MAS has reiterated in Parliament that cardholders benefit from these protections. The rules are process-bound, so evidence and timelines matter, but the point stands. A credit card gives you an extra layer between your current account and the outside world.

Fraud fights are also getting sharper at a system level. Since December 2024, the Shared Responsibility Framework has required banks and telcos to meet specific anti-scam duties, with a clear workflow for reporting and handling phishing cases and an expectation that entities bear losses when they breach those duties. The framework sits alongside the updated E-Payments User Protection Guidelines, which set baseline protections and clarify responsibilities. In practice, this means more real-time surveillance by banks, stronger cooling-off controls after device changes, and easier self-service account freezes when customers sense something is wrong. None of this eliminates risk, but it reduces the chance that a mistake or a moment of inattention empties your savings without recourse.

The third question is the one people worry about most. Credit card interest rates here are among the highest on any consumer product. If you roll over a balance, the effective annualised rate often sits near the high twenties, with some issuers applying 30.9 percent when the account is past due. One month of forgetting to pay might feel minor. Three months at those rates can turn a manageable bill into a stubborn problem. The math is hard to outrun once it starts.

Singapore’s rules try to prevent that spiral before it worsens. The industry runs under a Balance-to-Income limit, and banks must suspend a borrower’s unsecured credit lines when that limit is breached for three consecutive months. Put simply, total unsecured limits cannot exceed a multiple of your monthly income, and persistent overshoot triggers a stop. The rule is blunt by design. It protects borrowers who are drifting into high-cost debt from taking on more.

If you remove the fear and look at the mechanics, the positive case for credit cards is straightforward. You are already spending on necessities. If a card yields value on these transactions and you repay in full, the rewards are real and the cost is zero. If a dispute arises, a card gives you structured avenues to reverse charges that do not meet their side of the bargain. If a scam targets you, the system now demands more of banks and telcos than it did a few years ago. None of these advantages exist when you tap a debit card that draws directly from your savings account.

The risk case is equally clear. The moment you treat a card as a cash advance on future earnings rather than a payment tool, the cost of carrying balances begins to erode the value you thought you captured. Interest, late fees, and the temptation to spend past your plan quickly overwhelm any miles or rebates. That is why one cardinal rule sits above the rest. Pay in full and on time, every month. The simplest way to keep that promise is to automate payment through GIRO or a scheduled transfer and to place a calendar reminder a few days before the due date. Automation removes the memory test that leads to fees. The reminder gives you room to check for unfamiliar transactions and raise disputes within the required window.

If you struggle with overspending, set your own limit below the bank’s approved ceiling and ask your issuer to keep it there. Many banks allow you to request a lower limit that fits your budget. Declined transactions can be frustrating in the moment, but they are an honest signal that you are about to spend money your plan did not intend to spend. If annual fees concern you, remember that most issuers grant waivers for engaged customers who meet reasonable spending thresholds. A short call or a request in the app often solves it for another year.

Fraud remains a real concern, and vigilance is part of the deal. Do not rely solely on your own caution though. Use the new system tools banks have rolled out under the Shared Responsibility Framework. Make sure your bank app is updated, keep the 24-hour hotline in your phone, and enable transaction alerts that arrive fast enough to act on. If you see something wrong, freeze first, investigate second. The longer the delay, the lower the odds of recovery. The point of these new controls is to give you more agency in the minutes when it matters.

For those who prefer to avoid cards entirely, the choice is understandable. Cash and PayNow keep you inside your current balance and remove temptation. If you are building an emergency fund, paying down education debt, or navigating variable income, tightening the feedback loop between spending and your bank balance can be healthier for a season. The policy environment in Singapore does not penalise you for that choice. It simply recognises that well-used credit can make household economics more flexible without compromising financial stability.

If you do decide to use cards, align them to your real life rather than to marketing headlines. A travel card is not useful if you rarely leave the region. A supermarket card that excludes your usual chains will disappoint you at the end of every month. Read the merchant lists, the caps, and the exclusion tables before you apply. Then keep the set small enough to manage. A handful of cards that map to your actual spending will outperform a drawer full of plastic you forget to track. When life events change your spending pattern, switch. These products are designed to be replaced when they stop fitting.

The story that opened this piece was not about luxury. It was about planning. We were going to spend on groceries, transport, and utilities anyway. We chose cards that converted those expenses into miles within clearly defined caps and we cleared every bill the moment it posted. Over time, the miles accumulated, and a long trip became affordable. The business class cabin felt like an indulgence. The process that made it possible was not. It was a series of small, repeatable actions inside a system designed to reward those actions.

So are credit cards in Singapore a boon or a bane. The answer depends less on the card and more on the system around it. The policy guardrails are firmer than they were a few years ago, from rollover monitoring to anti-scam duties. Cardholder protections such as chargebacks and structured dispute processes remain a real buffer against loss. The rewards are meaningful when they match your expenses and when you keep to a full-payment habit. Viewed through that lens, the card is a tool. Used wisely, it stretches your dollar without borrowing your future. Used carelessly, it turns every perk into a very expensive illusion. The choice sits with the wielder. The rules are there to back you up, not to replace judgment.