With 8.2 million credit cards in circulation as on April 2015*, it is fair enough to assume that credit cards are a highly popular financial product in Malaysia. This is because credit cards offer you a wide range of advantages and benefits. Let’s take a look at some of the main benefits of credit card usage:
Easy to use – Credit cards are very easy to carry around and use. They slip in so easily into your wallet; compare this to carrying around large wads of cash and you not only have an advantage but you’ve also got rid of many security concerns. They are also very easy to use in ecommerce; you need to just enter a few details and that longed-for item is yours!
Secure – Credit cards are also highly secure, both in online and offline transactions, with security features that make them hard to misuse even when they or critical data concerning them are stolen.
Line of credit – With credit cards you get a handy line of credit that comes in useful in both emergency and other situations. Moreover, you are not required to immediately repay your credit card spends. The tenor for your credit card transactions before they become due can go up to 55 days.
You can take advantage of this feature to even make a little money for you: spend within your budget, put your cash reserves to work in a fixed deposit that matures on your credit card due date and is used to repay your credit card bills in full and pocket the interest!
Specialized benefits – Specialized credit cards go further than generic cards in offering benefits. Petrol credit cards offer higher discounts or rebates on fuel purchases; Business credit cards offer a number of business-related benefits like enhanced credit limits, vendor discount deals, extensive reporting options etc and Travel cards help convert spends into air miles which can be redeemed for air travel with affiliated airlines. Let’s take a look at some of such benefits:
Reward points – Most credit cards in Malaysia, if not all, reward your credit card spends with rewards points that can usually be redeemed against a range of rewards. For instance, the Citi Rewards Platinum Card allows you to earn 5X rewards points (for every RM 1 spent) all year round; you could even use these rewards points like cash in stores.
Cashback – Another rewards tool that banks use to keep you spending is the cashback. Here, you get a percentage of your credit card spends returned back as cash, cheque or as a credit to your credit card account.
Spends to miles – Travel credit cards will convert your spends to air miles which can be redeemed against air travel or other associated benefits on affiliated airlines.
Share them around – Credit card benefits need not be restricted to you. You can get supplementary cards issued and share these benefits with your family members and loved ones.
Financial record – Credit card statements are detailed records of your purchases and charges and other amounts due from you. You can use these statements to keep a record of your spends and to help you with your financial management.
Credit score – Because a credit card is a loan product, your credit card transactions become a part of your credit history and your credit score. Choose a credit card that is in sync with your financial habits and manage it well (plan your spends, keep them within your budget and pay them in full) and you could end up with a better credit score. Thanks to your credit card!
* Data courtesy: Bank Negara Malaysia.
Credit Cards in Malaysia 