10 Wise Ways to Choose a Credit Card

You are unique, so is your choice of a credit card. Your financial background dictates your lifestyle and the type of card to suit your needs. However, from the standpoint of a smart consumer, you should wisely consider the following salient points.   

    

1.      Type of cards: If you are in college you should consider using a cash card or a debit card instead of a credit card and get the hang of a plastic card without worrying about incurring credit card debt.  If you are one of those rich and famous people you should be using a charge credit like American Express. It has no credit limit and it is only limited by your financial resources. You are not given credit and you have to pay the full amount when you receive the monthly statement. For the rest of us, we can opt for a Visa or MasterCard.

2.      Free for life: Look for a card with no joining fee and no annual fee. Why pay extra when you can get a card for free?

3.      Lifestyle: Your lifestyle determines your preference for a credit card. When you are on the road a lot, a petrol credit card would be handy to control your travelling expenses. If you are a frequent flyer, a flight and lodging credit card would suit your way of life. I enjoy going to the movies, so I get a GSC Hong Leong Bank Visa Card and pay less for my entertainment expenses. It is a good idea to have a shopping credit card to reduce your grocery expenses.

4.      Carry two cards: It is prudent to carry two cards; one for Visa and another one for MasterCard just in case one or the other cannot be accepted for whatever reasons.  

5.      Choose a friendly financial institution: It is good to choose a card issuer that you are familiar with. In case you need help, you get speedy and satisfactory assistance.  

6.      Benefits: Look out for benefits suitable for you. One such benefit is a balance transfer. Are you carrying too many cards with huge balances? Look for one card to consolidate your debt with zero interest transfer for the longest period to ease your financial burden. Are you purchasing a big-ticket item, get a card with a zero-interest installment plan for the longest period.   

7.      Security: Get a card issuer usually a bank that is able to notify and alert you for unusual transactions promptly. It could be a genuine transaction, but it is reassuring to know that the bank is on top of things. 

8.      Low-interest rate: Get a card with the lowest interest rate just in case in one particular month you are unable to pay the full amount you will not be impacted with high interest for the outstanding balance. I always advocate credit cards are for convenience and not to obtain credit and incur debt. If one fine day you get into financial difficulties and default your repayments, your name may be black-listed in Central Credit Reference Information System (CCRIS) or CTOS, a credit reporting agency in Malaysia, or worst still you become bankrupt.

9.      Penalty charges: Issuing of credit cards is a lucrative business for financial institutions. You are charged for joining fee, annual fee,  interest for late payment, interest for outstanding balances, cash advance, replacement of lost card, just to name a few.    Get a card with fewer penalty charges or for a smaller amount  

10.  Cashback or rewards: With a cash-back card you pay less every month. With a reward card, you can accumulate points for the amount you spent and redeem for goods. The choice is yours. 

In Malaysia, go to iMoney.my to select a card to match your requirements