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3 Important Tips When Choosing Your First Credit Card

Wong Shu Lee  


  April 10, 2021

Nowadays, we tend to conduct many activities online. From shopping to paying rents, from learning to dating, almost everything can be done in the cloud. Our internet dependence has made credit card more important as it is the major payment method for online transactions. 


With so many types of credit cards available on the market, it’s often hard for first-timers to choose their first credit card. Therefore, we decide to share you a beginner’s guide to quickly identify which credit card is most suitable for you. 


Before we jump into the topic, should you even get a credit card? There are good reasons why every bank has set different qualifications for credit card applicants. The truth is that credit cards can easily get you into debt, but that only happens if you don’t practice good financial habits. 


Just make sure you always be aware of your outstanding balance to avoid overspending and always remind yourself to pay your bills once you received the statement. As long as you don’t overspend and you pay the bills on time, owning a credit card comes with a lot of benefits. 


Besides enabling you to make online purchases easily, credit cards also support contactless payment in brick-and-mortar stores. By using the ‘tap-and-pay’ method, you don’t have to exchange dirty notes during your transactions. This is particularly important in these Covid-19 times! Moreover, spending with credit cards is very rewarding as each card offers different spending bonus. 


So, are you ready to get your first credit card? If the answer’s yes, let’s get right to the first step… 


#1 Have Your Salary Meet the Requirement? 


As a general rule of thumb, credit card applicants in Malaysia must earn RM24,000 annually (approx. RM2,000 monthly) in order to be eligible for a credit card. If you don’t meet that requirement yet, it’s best to wait until you can earn more so that your application can get approved. 


To prove that you’re qualify for a credit card, you will need to show either your 3-months’ payslip or your EPF statement while applying for a credit card. If you’re running around doing odd jobs that pay you, say, RM50,000 a month but without a proper payslip or EPF statement, the bank may still turn you down because there’s no consistent proof of employment. 


#2 What to Consider When Choosing A Credit Card? 


Every credit card comes with different types of spending rewards. You can find the most suitable card based on your lifestyle and preferences to ensure you get the most benefit out of it. 


Below are four popular types of credit cards best suited for first-timers: 


1. Cashback – Converts the money you spend back into cash rebates. The amount you get back depends on the cashback rate of the credit card. 


2. Rewards – Point-accumulation with every Ringgit you spend. Can be used to redeem vouchers and items later on. 


3. Islamic – Shariah-compliant with the prohibition of gharar (overcharging) and riba (interest). Comes with takaful coverage and the convenience of paying Zakat. 


4. Airmiles – Designed to let you earn air miles every time you spend. Comes with loyalty programs offered by airlines. 


Some credit cards also offer special benefits to their users, for example, some cards help you to gain extra cashback or reward points when you using it to pump petrol. These ‘petrol cards’ best suit people who travel frequently by car. 


Recently, some banks collaborate with popular e-marketplaces (Lazada, Shopee, etc.) to offer cross-platform rewards to card owners. If you’re an active consumer on any of these e-marketplaces, you may consider applying one of these cards to enjoy the spending rewards on your favourite shopping site. 


#3 Annual Fees & Service Tax


The government is charging us RM25 per card on an annual basis, thus, don’t apply for too many cards at once. As this is your first credit card, you may want to look for a card that has zero annual fees. 


Most cards typically come with annual fees (some as low as RM30, some as high as RM1,300), but some can be waived according to the terms set by the issuer (e.g. swiping more than 12 times a year, swiping a minimum of RM50,000 a year). A card with zero annual fees will make it fuss-free for a newbie like you. 


Be A Wise Consumer


Credit cards are great tools. However, use them carefully or else you will fall into the debt abyss. Do not buy things that you can’t actually afford and don’t inflate your lifestyle. 


Money problems start when you delay your payment. Pay for things either immediately or within the 30-days statement cycle, or you could face high charge interests that will snowball into huge debts. Hence, let’s make sure you pay your bills on time and in full. 


Let’s use and manage your first credit card wisely! 


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