How to Pick an Emergency Credit Card

In times of financial emergencies, credit cards could be your knight in shining armour. We've magnified some of the properties you should look for in an emergency credit card.

Several terms have been coined to ideally describe a state of financial 'emergency' – some call it bad luck, poor timing, dead broke, while others just call it plain old not having tangible cash!

Whatever the moniker, its fundamentals don't change because when a money emergency occurs and you've exhausted all possible options of keeping your head off life's chopping block, the plastic that you keep tucked only for emergencies just might keep you buoyed for the time being.

In the spirit of yielding an umbrella in the wake of looming dark clouds (yes, directly translated from Bahasa Malaysia), we've identified key points that you would need to look for in an emergency credit card that could wipe your worries away in almost any comprehensible conundrum.

Low-Interest Rate

Scrubbing through the myriad of credit cards available in the market for this attribute comes second nature to every credit card hunter.

No doubt a low-interest rate might trigger your frivolous spending if treated as a regular credit card, but it serves emergency credit cards best with rates as low as 8.8% p.a as opposed to the standard 15% - 18% p.a.

Should you diligently be able to keep the low-interest rate credit card only for emergencies, you will find that the fat bill you just swiped will not incur a painful interest rate that could keep you from settling the outstanding amount. Conversely, it would definitely mean a steep climb toward clearing the debt post-emergency.

No Annual Fee

Most cards in the Malaysian market offer credit cards with annual fees at a flat zero, however many only offer the benefit if you swipe more than 12 times a year. This is a hassle if you don't plan to use your emergency card often (or are you expecting 12 emergencies per year?).

From a logical standpoint, should you be signing up for an emergency card, an annual fee of any sort would be a rent-my-pocket fee for no good reason. So do read the terms to find a credit card that truly is free for life without the conditions.

Having an annual fee on plastic that you hardly swipe other than during times of desperation would only add to your credit burden. By desperate situations, we don't mean Black Friday (you have cashback credit cards for that)!

Low ATM Withdrawal Fees

A little intertwined with the low-interest rate from the point above, low ATM fees also prove to be a strong necessity in emergency credit cards.

In the event that your plastic swiping abilities are ineffective due to a desperate need for tangible cash, an emergency credit card with low cash withdrawal fees would be your best bet as credit cards typically have quite a large fee on cash withdrawals.

Rock bottom ATM fees allow you to take the monthly installment in healthy strides and like the aforementioned, these cards are supposed to come to your rescue, not drown you in endless debt.

 High Credit Limit

Credit cards offer a different range of credit limits even though they follow Bank Negara guidelines on the issue, and one with a high spending limit is most welcome during times of financial emergencies.

This means that the credit limit you receive even though your salary is the same on all applications may differ from bank to bank unless your salary is between RM2,000-RM3,000 per month. Your credit record on CCRIS will also play a part in how much of a limit you are given.

Sometimes a little trial and error are in order. If a card you applied for is not giving you a good deal -cancel it and get a new one!

Emergencies such as hospitalisation and perhaps being completely stranded in a foreign country might end up being pretty exorbitant, and the last thing you need is an emergency credit card that is not able to serve its purpose.

Protection and Insurance

This doesn't mean you get to ignore your medical card insurance altogether because that in itself can be considered an emergency fund.

However, you can find other kinds of protection for travel and personal accident linked to credit cards. More commonly found in travel credit cards, this attribute is indeed a commodity for emergency credit cards.

In ill-fated incidents that occur overseas such as losing all of the local currency or simply running out of them, travel credit cards can prove very helpful in avoiding distasteful encounters with foreign authorities, immigration, or both!

Other perks of an emergency credit card that can serve you out of the country are one that can be accountable for lost baggage and hospitalisation, which are the most popular from a wide list of coverage depending on card exclusivity.

Alleviating the Unforeseen Circumstances

Its no doubt, there are some amongst us who can survive the strike of an unfortunate event that creates a financial state of emergency with no emergency credit card, but that does not completely grant anyone immunity from ridiculously expensive emergency scenarios.

You might even be a regular card owner and making sure your current credit card has checked as many as possible out of the above and will surely come to your aid in good times as well as troubles.

If the incredible amount of credit cards in the market confuse you, be sure to check out our credit card comparison for emergency credit cards and more to suit your lifestyle.

Source: https://ringgitplus.com/en/blog/Credit-Cards/How-to-Pick-an-Emergency-Credit-Card.html

Cashback Credit Cards - How They Actually Work And What You Need To Know

Cashback Credit Cards

As Singaporeans, we're an interesting species. When it comes to looking for good food or places to make out, we look online. But when it comes to our personal finances, like looking for the best credit cards, we ask our family and friends.

And the first thing your family and friends will say is, "Get a cashback credit card. You won't regret it." And you know what? As annoying as it sounds, they might be on to something there.

What is a cashback credit card?

A cashback credit card is basically one that earns you cash rebates whenever you use it. In "kiasu" Singapore, this is also known as a WIN-WIN situation.

It's like how "Shop N Save" became a household name in Singapore simply with the suggestion that you could save while spending. Never mind that the brand has since become absorbed by Giant. The fact remains that as a concept, it always makes sense to find ways to save money.

How does cashback work?

Every time you charge a cashback credit card, you earn cash rebates. These cash rebates are often put in a separate account so that you can redeem them at participating merchants or whenever it's convenient.

Say you get 5 percent cash back for dining on the new ANZ Optimum World MasterCard. If your meal is $100, that's $5 cashback.

Now, I must emphasise that cash rebates are not immediate discounts. You still need to be able to pay the full amount for your transaction first.

Let's use the example of the $100 meal with 5 percent cash back. It doesn't mean that only $95 gets charged to your card. If your available credit is $95 and you use your cash back credit card, your card will get declined because you can't afford the full amount.

How do you redeem your cash rebates?

There are so many different cashback systems available in the Singapore credit card market today. However, in general, this is how it works.

The cashback you earn each month is accumulated in a separate account. These rebates are then automatically used to offset your spending for the month, subject to several requirements, of course.

For example, the American Express True Cashback Card needs your account to be in good standing and not overdue before they give you your cashback rewards. The Citibank DIVIDEND Card only credits your account when you accumulate $50 worth of rebates.

The redemption of rebates is an extremely important factor to consider when deciding on a cashback card because if your lifestyle and expenditure aren't able to fulfil certain requirements then you're wasting an opportunity to save more.

What do you need to look out for when you choose a cashback credit card?

There are just two main questions you need to ask yourself when choosing a cashback credit card:

1. How much cashback can you earn?

This is often the most important question to ask. There's really no point getting a cashback credit card if it offers you a pathetic amount of rebates. As we pointed out before, you can use the POSB Everyday Card to pay your utility bill but does it really make sense if you only earn 1 percent cashback? That's only $1 a month.

Some cashback cards now offer 5 percent cash back and more on specific transactions. The OCBC FRANK Card, for example, offers an impressive 6 percent cash back on every online transaction.

2. How easy is it to earn cashback?

While it's important to know how much cashback you can earn, but you should not make your decision based on this question alone. You also need to find out exactly how many hoops you need to jump through to earn your rebates.

For example, the UOB One Card promises to give up to a 3.33 percent cash rebate on any transaction, even recurring payments. That alone should make it one of the highest cash rebates amounts on the market today.

What's the catch? Here are just three problems I have with cards like the UOB One Card (and there are certainly other cards with some similar requirements, but this is one good example).

Firstly, you need to spend at least $300 each month for three consecutive months. That means if you miss the minimum spending requirement of $300 for just one month, you don't get ANY cash rebates for three months.

Secondly, you have to make at least 3 purchases on the card each month, or you're not eligible for the rebates. Now, you might say, this should be easy to do, especially if you're making recurring payments for your phone bill or insurance. But the fact still remains that, if you're not careful, you could forfeit your rebates for three months.

Thirdly, the cash rebates you earn are "UP TO 3.33 percent". In reality, the cash rebates are tiered at fixed amounts of $30, $80, and $150 per quarter (depending on a minimum required spend of $300, $800, and $1500 per month respectively). Basically, you may not get a 3.33 percent cash rebate all the time.

Say you consistently spent $750 monthly on the UOB One Card, for example. This is less than the second tier minimum requirement of $800 per month.

What happens? You then only earn $30 for the quarter, or $10 a month in cashback, which equates to 1.33 percent a month. Quite a difference from the 3.33 percent advertised.

Compare this to cards like the ANZ Optimum World MasterCard, where you earn at least 1 percent cash rebate with no minimum spending and no cap on how much cash rebates you can earn. You earn a little less, yes, but you never need to worry about jumping through any hoops in terms of expenditure amounts.

Why should I choose a cashback credit card over other types of credit cards?

The short answer - to keep your life less complicated. Unlike rewards cards or air miles cards, you usually know exactly how much you're getting back with a cashback credit card. However, it ultimately depends on your lifestyle.

Take the example of those of you who travel regularly, for example, because your family lives overseas. It makes much more sense to get an air miles card and channel all your expenditure into earning frequent flyer miles so that you fly for free.

But if you're just looking to save while you shop, then getting a cashback credit card is for you. And then YOU can be the one annoying your family and friends with your stories of just how much your cashback credit card is saving for you.

One final thing you MUST note: as with the general principle of utilising credit cards, paying your bills on time is especially key for cashback cards.

Unfortunately, we will probably never live in a world where cash rebates compound as well. So pay your bills. In full, and on time.

How to Get the Most Out of Your Secured Credit Card

A Secured Credit Card

If you're jump-starting your credit history or rebuilding bad credit, there's nothing more frustrating than hitting a brick wall. You need credit to build credit — one of life's super-annoying catch-22s — but when your credit history is nonexistent or marred by past mistakes, just being approved for a credit card so that you can start over is an uphill battle. But not all hope is lost. A secured credit card can provide the credit you need to establish or fix your credit.

Secured credit cards work just like unsecured cards, with one main difference: you give the bank a security deposit, and the amount of your deposit determines your credit line. These cards are the next best thing if you can't qualify for other credit cards. Here are six ways to maximize your experience with them.

1. Start With a Smaller Credit Line

A secured credit card is by no means a prepaid credit card. The deposit is nothing more than collateral — in case you skip out on payments. You'll receive a monthly statement just like any other credit card, and you're required to make at least the minimum payment each month.

Ultimately, you determine your own credit line. You can give the bank a security deposit as low as $250 and receive a small credit line, or you can give the bank a security deposit of $2,000 and receive a higher credit line. But if you've had self-control problems in the past (and you probably have; that's why you have a secured credit card now), it might be best to start with a low deposit and credit line. Too much available credit might be too tempting, but with a low credit line, you won't get in over your head.

2. Make Sure the Bank Reports to the Bureaus

Not every bank issuing a secured credit card reports to the credit bureaus every month. Since you're trying to rebuild or establish credit, it's crucial that the bank updates your credit report with a positive activity, such as timely payments.

Read the fine print before applying for a secured credit card or contact the bank and ask how often it reports to the three credit bureaus. Some banks only update credit reports every few months, while other banks never send updates. Ideally, you want to get a secured credit card from a bank that reports activity every single month.

3. Minimize Credit Card Fees

Secured credit cards are helpful but expensive. They might have an annual fee, which is also typical with some unsecured credit cards. But many secured credit cards also charge monthly maintenance and a setup fee. The bank charges these fees directly to the card, which means the credit card arrives in the mail with a balance — before you make your first transaction. You can't avoid fees, but you can shop around and compare the cost of different secured cards.

4. Choose a Low-Rate Card to Save Money

Don't believe anyone who says every secured credit card features a high-interest rate. Yes, some cards have rates significantly higher than unsecured credit cards; this is expected since secured credit cards help individuals who need to build or rebuild their credit. However, some secured credit cards also feature competitive rates. If you know you're going to carry a balance from month-to-month, compare rates before applying to save on interest charges.

5. Only Buy What You Can Afford

A secured credit card can improve your credit history, but only if you use the card responsibly. Timely payments make up 35% of your credit score, so you need to pay your statements on time every month. Since the amount you owe makes up 30% of your credit score, only charge what you can afford and pay off your balance every month. Your spendthrift days are officially over, son.

6. Ask Questions and Know What You're Getting

When it's all said and done, a secured credit card is a steppingstone to an unsecured card. Depending on your bank, you may automatically qualify for an unsecured credit card after 12 to 18 months of timely payments, at which time the bank refunds the security deposit. But, you won't know about this perk unless you ask. Additionally, some banks will increase the credit line on a secured credit card without requiring an additional deposit from a cardholder, and some secured credit cards come with rewards programs or offer other perks, such as free access to credit reports.

Do you have experience with secured credit cards? How did they help you?

Source:http://www.wisebread.com/how-to-get-the-most-out-of-your-secured-credit-card

Visa vs. MasterCard: Is There a Difference?

Visa vs MasterCard

Most Americans today have at least one credit card, and many, more than likely, have a number of them. As of December 2014, the average debt per credit card is over $15,600, and American consumers owe almost $883 billion total in credit card debt. The two primary credit card companies are Visa and MasterCard. While both companies offer credit cards with similar features and usability, there are some differences, though most users won’t notice them as many merchants accept both cards. The companies are publicly traded, with Visa and MasterCard commanding a $153.6 billion and $94.4 billion market capitalization, respectively

HOW CREDIT CARDS WORK

Credit card companies like Visa and MasterCard don't actually issue individual credit cards directly; rather, banks, credit unions, and even retailers issue branded cards. The issuing financial institution usually sets the credit card’s terms and conditions, including interest rates, fees, rewards, and other features. When a credit cardholder pays his or her bill, the financial institution receives the payment—not the credit card company.

Visa, MasterCard, and other credit card companies, such as American Express and Discover, make money by charging merchants and businesses a fee for accepting their cards as a method of payment. These firms don't consider themselves financial companies: instead, Visa refers to itself as a payments technology company and MasterCard prefers to be called a technology company in the global payments industry.

Today, not only do businesses accept credit cards, but services such as PayPal and Square let everyday people accept payment via Visa or MasterCard.

WHERE VISA AND MASTERCARD DIFFER

While differences in interest rates, credit limits, rewards programs, and perks are controlled by the issuing financial institutions, Visa and MasterCard compete for those financial institutions. The credit card companies will offer certain perks such as identity theft and fraud protection, travel, and car rental insurance, or purchase protection as incentives. Business credit card customers may also be entitled to certain discounts at hotels, airlines, and gas stations. Merchants may also be able to negotiate different fees with the credit card companies depending on volume.

Since the only underlying difference between credit cards are the perks, choosing the right card network comes down to what the customer values most. For example, Visa tends to have a better “Loss of Use” coverage on car rental insurance than MasterCard; however, Visa's benefits exclude car rental insurance in certain countries entirely. MasterCard offers “Return Protection” with very few cards, whereas Visa's Signature cards widely carry that service. For gold or other elite cardholders, the credit card companies may also offer concierge services to handle certain tasks and save time for the consumer. These services vary and may provide access to event tickets, restaurant reservations, hotel recommendations, or even assist with gift purchases given the recipient’s age, preferences, and the buyer’s spending limit.

Many credit cards that participate in bank-offered rewards programs can be changed from Visa to MasterCard or vice versa upon request and reissued. It’s also worth noting that among the most common credit card networks, American Express usually offers the greatest perks. However, these cards usually carry an annual fee and are less widely accepted than Visa and MasterCard. Discover often has the lowest degree of perks, having no purchase or return protection, no rental insurance, and no concierge services. 

THE BOTTOM LINE

Visa and MasterCard are two of the most popular credit card brands in the world, though these companies don't issue credit cards themselves. Banks and other financial institutions issue the cards, setting interest rates and credit limits and sponsoring rewards programs. Since Visa and MasterCard are usually accepted wherever credit cards are taken, the consumer should focus more on the interest rate and features of the card rather than the brand. The actual differences between the credit card companies are subtle but may impact a consumer when it comes to perks such as fraud protection, travel or car rental insurance, and purchase protection.

Source:http://www.investopedia.com/articles/personal-finance/020215/visa-vs-mastercard-there-difference.asp

Secured Credit Cards vs. Unsecured: What’s the Difference?

Here’s a catch-22: you need a credit card to boost your credit, but you can’t boost your credit without a credit card. Secured credit cards can help people with poor credit escape this paradox. But what’s the difference between a secured credit card and an unsecured card anyway?

 Unsecured credit cards 

Most credit cards are unsecured, which means they don’t require a deposit as collateral in case cardholders can’t pay off their debt. Rewards, retail and low-interest cards are typically unsecured, and they offer benefits such as cash back, travel perks, store discounts and interest-free introductory periods. Since they’re less likely to pay off their debt, it’s difficult for people with bad credit to qualify for secured cards. There are a few unsecured credit cards that are easy to qualify for, but they have high annual fees, which are deducted from the credit limit. Rather than opening a high-fee card, we suggest applying for a secured one.

Secured credit cards 

Secured credit cards are designed for people with bad credit or no credit. Since these customers are considered a bigger risk for card issuers, they’re required to make a deposit. The deposit amount varies, but it’s typically equal to the credit card’s credit limit. For example, if the credit limit were $500, the deposit would also be $500. Once the initial deposit is paid, secured cards work just like unsecured ones. They’re accepted wherever credit cards are, including online, and you incur interest if you don’t pay your balance off in time. You can get secured credit cards from the same issuers and networks as unsecured cards. Like unsecured cards, some secured cards come with annual fees, but we suggest you stick to cards with yearly fees less than $50.

 Final word 

Although they require a deposit, secured credit cards are better than no credit card at all. If you get one, your goal should be to improve your credit score until you’re eligible for an unsecured card. Some issuers will let you transfer your secured line of credit to an unsecured one when you qualify. If you minimize your credit card spending and pay off your balance in full and on time, you’ll eventually become eligible for an unsecured card and escape the bad credit trap.

7 Advantages of a Debit Card

Debit Card

According to a news item in the paper, more and more Malaysian are using debit cards and debit card spending has increased by 50% year-on-year. A debit card offers many benefits:

1.      Better Control of personal finance: A debit card allows you to spend only on what you have. You can use your debit card to spend according to your budget.  However, a credit card, without using it wisely, can lead to bankruptcy.

2.      Safer: You don’t have to carry a lot of cash when you go shopping, you avoid getting robbed.

3.      Simple life: With a debit card shopping is hassle-free. There is no need for a buyer and a seller to count cash and avoid errors.

4.      Shop online: When you have a debit card, you can shop online. It is just like a credit card. 

5.      Avoid running out of cash: There is no need to look for a bank or an ATM when you are short of cash, just use your debit card.

6.      Supporting documents for your spending: It is easy to monitor your spending because there is a slip for each and every transaction.

7.      Worldwide acceptance: Like a credit card, it is accepted internationally and you can withdraw local currency from ATM when you are overseas. 

You need to monitor your spending and avoid getting into an embarrassing situation when a transaction cannot go through because there are insufficient funds in your bank account.

Source: 7 Advantages of a Debit Card.

4 Types of Cards for 4 Types of People

There are 4 types of cards that you can use to make purchases. They are charge cards, credit cards, debit cards, and prepaid cards. Each type of card is specially catered to different people.


Charge Card: This type of card has no credit limit and you have to pay the amount fully when the statement arrives. It is for the rich and famous. They have spending power beyond the credit limit and they are capable of settling the amount fully upon receiving the monthly statements. Their lifestyle demands a card that they can spend freely and it is only limited by their spending power as demonstrated by their spending pattern. American Express is such a card.

Credit card: People who can exercise self–restrained will find this type of card useful. They don’t do impulse buying and they limit their purchases to what they need and not what they want. They pay promptly and fully and not just pay the minimum amount. They incur no late charges and finance charges. Visa and MasterCard fall into this category

Debit card: This type of card is suitable for young graduates who have secured their first job with decent pay and they want to have their first experience of using a credit card. The card is linked to their current or savings account so they will not overspend. They don’t run the risk of building up debt. You can’t use the card when your fund is exhausted. Visa and MasterCard are the issuers for this type of card.

Prepaid card: This type of card is for people who are budget conscious. They load the card with a specific amount for specific purposes and they spend accordingly. There is no overspending and there is no debt. You can get this type of card which is also issued by Visa and MasterCard.


Choose an appropriate card to suit your current lifestyle.

4 Types of Plastic Cards to Make Purchases

There are four kinds of card, namely, credit card, charge card, debit card, and prepaid card.


Credit Card: The credit card issuer, upon approval of your application, will issue a card to you with a credit limit. You can use it worldwide. When you receive the monthly statement you pay the full amount or the minimum amount. Visa and MasterCard are such cards.

Charge Card: American Express and Diners Club are the issuers of charge cards. Upon receipt of their monthly statement, you have to pay the full amount. However, there is no credit limit. It is only limited by your spending power.

Debit Card: The card is linked to your savings or current account. Every time you use the card the amount is deducted from your account. You use your debit card just the way you use your credit or charge card.

Prepaid card: The other card is the prepaid card. You load the card with a certain amount and then you can use it like a credit or debit card. You use the prepaid card to limit or control your monthly spending.


Choose the right card to suit your needs