How to Choose Your First Credit Card

Credit Cards

In the market for a new credit card? Here are the basic questions to ask yourself before settling on your first credit card.

The first banking product for most fresh grads; credit cards are a great way to kick-start a blank credit record and teach a newbie about responsible borrowing. But with hundreds of cards flooding the market - how is a first-timer to choose?

Yes, there are definitely a lot of cards, and what they offer you will be vastly different so before you ride off into the sunset with the plastic of your dreams - some factors need to be considered. Here are our tips to help you along.

Which Credit Cards Are Available to You?

There may be 300 cards in the market, but certainly, not all of them are will be available to you as credit cards start with basic minimum income requirements. The higher your salary; the more attractive the card you are eligible to apply.

That's not to say then that newbies have limited options! There are many credit cards available with the barest of minimum requirements. To find which match yours, you thankfully, no longer have to head to every bank. Check out our credit card comparison page with all the cards in one place.

Once you've narrowed down the possibilities - it's time to cut it down further to help you make a decision.

Give Priority to Cards with No Annual Fee and Low-Interest Rates

When you're a fresh grad in the working world; for the most part, you are probably starting at a fresh grad salary. You will be learning to ropes where money management is concerned and most likely will have many more bills to pay than when you were studying.

Considering the challenges - the last thing you want is for your credit card to be an unnecessary burden. So when selecting; choose the cards with the lowest interest rate and no annual fees.

Low-interest rate cards are easy enough but no annual fees may be a bit of a task to find. Many credit card companies claim to offer a waiver on annual fees but they then slip in a condition - only applicable if you swipe 12 times a year or only for the first 2 years and then subject to bank approval.

Best to avoid the cards with sneaky terms for now. When you're juggling getting used to working and life as an adult; waivers that attach themselves to spending could turn out to be a motivator to fall hopelessly in debt. You may be bummed to miss out on the awesome offers and benefits other cards tout but remember that there's always time in the future to switch once you are steadier on your financial feet.

Consider Your Lifestyle

You've probably already narrowed your choices down to a select few cards and here's where the fun starts. Now you get to decide which perks suit you best. Credit cards in Malaysia come with a range of benefits from cashback, rewards points, and air miles; some even with a combination of a few.

Think about the things you like to do; will be doing most and which benefit offered will be the most useful to you. If you're getting a little starry-eyed over the choices; you can always try the card with a range of a few benefits that may be on a lower scale. Once you've had a taste of each you will be in a better position, later on, to switch to a card that suits your newfound likes.

Have Backup Selections

Just because you've done the work and finally chosen the card you want most of all - it doesn't necessarily mean the bank is going to give it to you. You may have a spotless credit record (ie. no credit record) but depending on the bank's internal processes; there may be a host of combining factors that make you not the prime applicant at the moment.

For this reason, it helps to list a few backup card selections to apply for in case your star card is not approved.

This does not mean you go out and throw card applications left right and centre! This may backfire if all your cards are approved and you are stuck with more than you can legally hold (Bank Negara Guidelines limit the number of cards you hold when you're income is equal to or lower than RM3,000 per month) or if it entices you to swipe, swipe, swipe and be left with a mountain of debt.

Get Ready to Own Your First Credit Card!

Once the grueling selection and application are over (We recommend applying online with no fuss, forms, or bank visits via our XPress-apply page), it's time to welcome your new plastic baby!

Preparing your financial life for the arrival of a new credit card means being clear on your responsibilities to the bank and the best practices when swiping. A credit card can be a friend or foe depending on how you treat it. So spend wisely, borrow responsibly and you'll find a world of benefits open up to you.

Have fun!

Should You Apply for a Credit Card in the new year?

Image via iStock.

New year, new credit card? Before you apply for a credit card to go along with a new year full of possibilities, read on to find out why you should or shouldn’t get a new credit card in the new year.

 I don’t have a credit card — why should I get one in the new year? 

Responsibly using a credit card is one of the easiest ways to build credit. A good credit score can help you obtain credit at reasonable rates, which will come in handy if you choose to purchase a home in the future since a 1% difference in interest rate could cost you thousands. Good credit also allows you to set up utilities without paying deposits, get a new cell phone contract or get a new job. Credit cards also come with the perks of potential rewards, protection benefits, a grace period between when you buy an item and when you have to pay it off, and low liability in case of fraud. Getting your first credit card means you will be able to take advantage of all of these perks and benefits.

 I have a credit card — why should I get a new one in the new year? 

If you have a credit card, chances are you’ve built credit already. This year, you might want to take advantage of that hard work by getting a credit card approved for those with good or excellent credit. The perks and benefits are often better, and they tend to offer the best rewards programs. You could plan ahead and get a credit card with an awesome signup bonus to use for your summer travel. Or you can apply for a rewards credit card that gives you high ongoing rewards for the things you spend on most, such as groceries, gas or dining out. Another reason you might want a new card is if your current card lacks EMV technology. Credit cards with EMV chips aren’t easily compromised, protecting you from having your card information skimmed. If you have a chipped card, use it the proper way to take full advantage of the chip — dip, don’t swipe. It’s easy: Enter your credit card into the terminal, follow the prompts, and remove the card when the receipt begins to print.

 Why shouldn’t I get a new credit card in the new year?

Of course, getting a new credit card has disadvantages, too. Each new credit card application triggers a hard inquiry, which pulls your credit score down a bit. If you’re firmly in the excellent credit score range, this isn’t a big deal. But if you’re between fair and good, or good and excellent, you won’t want to sacrifice any points to get a new credit card. If you’re spending habits aren’t the most responsible, a new credit card isn’t a good idea. It will give you access to more money and could lead you deeper into debt. So before you apply for a new card, make sure you’ve cleared your existing credit card debt and proved to yourself that you can responsibly handle plastic now.

 The takeaway: Before you apply for a new credit card, consider the pros and cons. Get a credit card if you want to build credit, obtain a better credit card than you have now, or need a card with an EMV chip. Don’t get one if your credit score can’t handle the hard inquiry or you don’t feel you have a good handle on your spending.

Are You Using the Right Credit card?

Credit cards

With Christmas approaching, it's time to check your credit card, whether you want to cut interest payments or earn rewards

The build-up to Christmas has begun and with it the spending on everything from presents to decorations to food. Many of us use credit cards at this time of year, either to spread the cost or so we can build up cash back or rewards from all our festive spending. But are we using the right cards?

Research from Sainsbury's Bank has found that 15 percent of us put large purchases on standard credit cards but don't clear the balance straight away. With standard credit cards charging an average of 18.9 percent APR those shoppers will pay an extra £268.36 repaying £2,000 over 18 months compared with if they had paid with a 0 percent credit card.

That isn't the only time people get it wrong with plastic. Many of us have a bog-standard credit card that we use regularly and repay the balance in full each month. That is great as you aren't paying any interest and you are building up a good credit history, but if you switched to a cashback or reward credit card you could benefit materially from your good credit habits.

Here are the best credit cards to use in the build-up to Christmas.

To spread the cost of Christmas

If you need to buy a few things and know you won't be able to pay off your card at the end of the month then go for a 0 percent purchase credit card. These cards allow you to spend money that you can then pay off over a long period without incurring any interest.

The best offer currently available is from Halifax. Its Purchase Credit Card offers 0 percent for 20 months. Just don't continue to use the card after that point unless you can pay the balance off in full: the interest rate jumps to 18.9 percent APR.

To earn rewards on festive spending

For those who pay off their credit card balance in full each month then interest rates aren't an issue. Instead, you should be looking at what you can earn from your spending.

If you'd like to earn air miles then you may want Lloyds Bank Premier Avios Rewards Credit Card. You'll earn up to 1.5 Avios points for every pound you spend and if you spend £12,000 a year you'll get a free companion ticket – meaning you can take someone with you on a trip at no extra cost (except their taxes and charges). According to TotallyMoney.com, this adds up to rewards worth £642 over three years, if you spend £1,600 a month on the card.

Just be aware that rewards points can be devalued at any time by the company issuing them and air miles can be tricky to spend as competition for rewards seats on flights can be fierce.

Bank some cashback

A better option is to go for a cashback credit card where you earn cold hard cash that can't be devalued, and which you can spend on anything you like.

The best of the bunch at the moment is the American Express Platinum Cashback card. It pays 5 percent for the first three months – perfect for Christmas – then the rate falls to 1.25 percent. The card has an annual fee of £25, but if you spend £1,000 a month on the card you'll easily earn that back – TotallyMoney.com estimates you'd earn £493 over three years.

Avoid charity credit cards

At this time of year, many of us like to help out charities while buying things for ourselves. There are numerous great ways to do this but a charitable credit card isn't one of them. The amount of money the charity receives is usually pitiful. Typically just 0.25 percent of your spending goes to charity – that is 25p per £100 you spend.

If you want a charity to benefit from your credit card spending take out a cashback card instead and donate what you earn. · 

Read more: http://www.theweek.co.uk/prosper/personal-finance/61453/are-you-using-the-right-credit-card#ixzz3JlCCSX79

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

5 Credit Cards That Give 5% Cash Back

This is a guest post by Mike, the owner, and operator of CreditCardForum. There you will see his ratings of the best credit cards for 2012 (for U.S. residents). What follows are 5 of his favorite cashback cards for people who live in Malaysia.

For those who carry a balance, credit card rewards should not be a priority. Why? Because the interest rate you are paying is likely many times higher than the value of your cash back or points. So if you carry credit card debt, your focus should be on finding the lowest APR possible.

However, for those who pay off their entire credit card bill every month (and therefore pay no interest) then reward programs are a lucrative proposition. It’s like getting free money. But which programs pay the most? Well here are 5 credit cards available in Malaysia that give you rewards worth up to 5%.

1. Citibank Cash Back Platinum Card

I wish I lived in Malaysia so I could take advantage of this offer, because Citi doesn’t offer anything this good in the United States!

You earn 5% cashback on petrol (or as I call it, gas) spending up to RM600 per month. For groceries, you earn 2% on up to RM3,000 spending each month at selected stores (Servay, Econsave, Carrefour, Tesco, Cold Storage, Everise, Giant, and Mydin). There’s also a 2% rebate at some pharmacies (Caring, Guardian, and Watson) and CitiBank online payments for Celcom, DiGi, Maxis bills. Everything else will earn you a flat 0.3%.

However, the downside is that this card will cost you RM195 per year. So if you don’t spend much, it might not be worth it. The income requirement is RM40,000 per year.

2. HSBC Visa Signature

This is a more exclusive card since your annual income must be at least RM100,000. If you earn that much, this card is a good deal because there is an annual fee waiver as long as you make at least 12 swipes per year.

The rewards programs will give you 5 points per RM at participating grocery stores, shopping malls, and department stores (on the spending of up to RM1,000 per month). You also earn 5x points for all dining and hotel purchases made overseas (up to RM1,500 per month). For all other spendings, it is 1 point.

With this card your points can be redeemed for different things, ranging from travel to merchandise. Depending on what you choose, it might be possible to get a high enough value so your 5x points = 5% cashback.

3. Maybankard 2 Gold Card

This is an interesting offer because you actually get 2 credit cards; an American Express and a Visa or MasterCard. There is a lifetime fee waive and the income requirements are more reasonable at RM30,000.

The MasterCard is not very exciting, because it will only earn 1x TreatPoints for every Ringgit spent. However, the American Express will give you 5x TreatPoints. Best of all, during weekends the American Express card will also give you 5% cashback (up to RM50 per month).

4. Giant-Citibank Credit Card

If you shop a lot at Giant, this credit card offer is worth considering. The income requirement is low at RM 24,000 however the annual fee is relatively high at RM120.00. So make sure you study the cashback program closely to see whether or not it will be worth it for your spending.

• Tier 1: It your total monthly spending (at Giant + elsewhere) is under 800RM then you will only earn 2.5% on the purchases from Giant and 1% at participating restaurants and utilities.
• Tier 2: If your total monthly spending is 800RM and above, this is one of the best cashback credit cards around. It will give you a full 5% cashback at Giant stores and 2% on the restaurant and utility categories.

However, the biggest disadvantage with this program is that your maximum rebate at Giant stores is RM 400 for Tier 1 and 600 for Tier 2. Your total annual rebates are also capped at a maximum of 600.

5. OCBC Titanium Master Card

Just like the HSBC Visa Signature, this credit card is free as long as you make at least 12 purchases per year. The income requirement is RM36,000 but I have read reviews from customers which much higher incomes who for some reason, don’t get approved for it. So it sounds like this card is not the easiest to get.

This has one of the best cashback programs on the market because it’s based on categories, instead of specific merchants. You will get 5% cash back at grocery stores, restaurants, petrol stations, and utility bills. Everything else will be a flat 1% rebate.

With this generous program, it comes as no surprise that there is a limit to how much you can earn; a max of RM50 per month and 600 per year.

Conclusion?

I own and operate one of the most popular credit card websites in the United States, so I know the reward programs quite well! We do have some excellent 5% cashback card offers in the US, but nothing that compares to the above credit cards! So if you live in Malaysia, consider yourself lucky!

Top Five Ways on Negotiating a Credit Card Deal

This is a guest post by Mike Brains

 There are many ways you can improve your credit card deal by negotiating with your card provider. In fact, by following these tips, you could save a lot of money.

1. You should always compare credit cards. If you see a credit card with a better APR than you currently have, tell your card provider.

Often, they will reduce your APR to keep you as a customer. If they can't do this, you should transfer to a provider that offers the best credit card rates.

2. Do not be afraid to take advantage of your loyalty as a customer. If you have held a credit card for a long time, you can use this to negotiate a reduction in the interest rates or fees. Highlight how valuable you are as a customer, and your card provider may reward you.

Again, it makes sense to compare credit cards. Knowing what other companies are offering will help you negotiate with your current provider.

3. It also helps to know how you use your card when negotiating. For example, if you always pay off the balance early, then it doesn't matter if you are getting the best credit card rates. After all, you won't be charged interest if you have no balance. Instead, you should try and persuade your provider to offer rewards such as air miles or cash back. On the other hand, if you often have a balance on your card, your negotiations should be aimed towards reducing the APR and any fees.

4 Make sure you talk to someone with authority when negotiating with your credit card company. Most customer service staff won't be able to offer the best credit card rates, so ask to speak to a supervisor.

5. Finally, try to reduce any fees. Once again, it helps to compare credit cards so you can quote the fees charged by other companies.

Nothing will get your credit card company to act like threatening to close your account and go to a rival.

5 Tips to Choose a Credit Card

All the banks are going after you to sign up for one or more of their credit cards. How do you determine which one is best for you? Consider the following 5 points to make up your mind:

1. Free For Life: Look for a card without charging annual fees. CIMB Petronas MasterCard is such a card. You can save around RM100/= to RM200/= per year.

2. Low-interest rate: Check around to determine which card charges the lowest rate in interest on outstanding amount. This is not an important consideration when you pay credit card bills fully on time.

3. Rewards or cashback: You have to decide which one is your preference. Would you like to accumulate points to redeem for goods or you prefer to pay less with cashback or rebate? For me, I would like to pay less at the end of the month to reduce my expenses and cash outflow.

4. Gas, airline miles, or grocery card: It all depends on which one you use the most. When you are always on the road, get the CIMB Petronas MasterCard. When you do a lot of grocery purchases get the Giant-Citibank Credit Card You pay less when you use both cards for your petrol at Petronas and sundry purchases at Giant. If you are a frequent flyer you may wish to consider Air Asia Citibank Card and accumulate points and fly for free later.

5. Customer satisfaction: According to J.D. Power and Associates’ report about 2009 Customer Satisfaction With Credit Cards, they have identified the six key factors of interaction, fees and rate, billing and payment process, rewards, benefits and services, and problem resolution. American Express ranks the highest among credit card issuers for a third consecutive year. Get a card with a financial institution that gives you the most customer satisfaction.

When you have a card, use it wisely. A credit card is for convenience and savings and not for credit. Pay fully and promptly every month to stay out of credit card debt