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If you have been told to avoid credit cards at all costs, you have been fooled! A credit card is a financial tool that you can use to enhance your finances. Especially now, when you have to be wary of cost-cutting measures at work and economic implications caused by COVID-19, a credit card would definitely make your life easier.
Staying at home, social distancing, and opting for cashless payment methods when buying necessities have become the new normal. Apart from using a credit card for cashless transactions only, you can benefit far more if you do it right.
So, if you have been putting off getting a credit card because you were worried about raking in debts, we have five fool-proof tips on how you can make your credit card work for you and avoid being in debt.
Pay your bill in full every month
You need to stay out of credit card debt altogether. That means charging only what you can afford and paying your bill in full every month, or even a few times a month if it helps you stay ahead of it.
Avoid carrying a balance, you should pay off your balances in full. The reason is, you won’t incur interest.
Credit card debt is generally the most expensive form of financing, with rates in the high teens. If you consistently carry balances, you could lose thousands of ringgit to interest, so it’s important to pay off your balance in full.
Use cashback and rewards credit card
You can use credit cards to pay for groceries, online shopping for example Lazada and Shopee, dinner dates, buying flight tickets, and even reloading your e-wallet. What if we tell you that you can get rewarded every time you make payments using your credit card.
Cashback and reward credit cards will greatly benefit you in the long run. The more you use your credit card to pay for your necessities, the faster you will increase your reward points. As most of the retails outlets and online businesses accept credit cards now, it is really easy for you to swipe your credit card instead of using cash or making online transfers.
For instance, you can enjoy up to 15% cashback on autobill payments, online purchases, petrol and 0.2% cashback on other spends with JustOne Platinum Mastercard® credit card.
Meanwhile, the HSBC Amanah MPower Platinum Credit Card-i offers up to 8% cashback on petrol, groceries, and e-wallets for monthly spending above RM2,000.
Raking up reward points and utilizing the cashback are efficient ways to save money while spending money. In the long run, you will be able to see how much money you saved by using the reward and cashback credit cards.
Balance transfer and debt consolidation
Apart from rewards and cashback credit cards, you can also greatly benefit from balance transfer credit cards. Balance transfer credit cards will provide you with an effective solution if you are struggling with credit card debts from multiple credit cards.
Balance transfer credit cards enable you to consolidate all your existing credit card debts into one single payment. Hence, instead of struggling to pay several payments with different interest rates every month, you will be paying one payment with one single interest rate. This will help you to manage your debts easily without getting stressed out about your finances.
The key here is to find a balance transfer credit card that offers you a reasonable pay-over period and interest rate.
For instance, the Public Bank Quantum Visa offers a low one-time upfront interest starting from 0%. When your debt transfer amount is from RM1,000, you will pay over 6 months with 0% p.a and 1.5% one-time upfront handling fee. The tier increases according to the amount of debt you are transferring to the new credit card. If the transfer debt amount is from RM6,000 you can pay over 36 months with 0% p.a and 7% one-time upfront handling fee.
With the UOB YOLO Visa credit card, your interest rate is determined based on your pay over period instead of the amount of debt transfer. If you pay over 6 months, the interest rate is 0% p.a and 3% one-time upfront handling fee, if you pay over 12 months, the interest rate is 0% p.a and 4% one-time upfront handling fee and if you pay over 18 months, the interest rate is 0% p.a and 5% one-time upfront handling fee.
All you need to do is choose a balance transfer credit card that will suit your monthly budget and financial planning for the long run. Instead of struggling and getting stressed out due to financial issues, you can opt for balance transfer credit cards to ease your financial journey.
Build your credit score for long term financial gains
Obviously, you will be on the right financial track if you are being rewarded for every purchase you make through your rewards and cashback credit card as well as if you are working hard to pay off your credit card debt using balance transfer credit cards.
The question is: Why is it important to be on the right track when it comes to your finances? Apart from your peace of mind, having a good financial record will benefit you in the long run when you are looking to upgrade your life.
Your credit score. Your credit score is a score that shows the state of your credit health. Banks use your credit score to approve or reject your credit card and loan applications. Your credit score depends on your payment history, credit mix and loan amounts owed, length of credit history, new credit applications, and legal track record.
So, if you have been paying your credit card and loan monthly installments without fail, your credit score will be good. On the other hand, if you don’t have any credit card or loan, your credit score will be bad and you might face difficulty in securing a house or business loan.
Hence, getting a credit card and paying it off every month will provide you with a good credit score and it will be easier for you to secure a loan when you need it.
Get the best credit card with benefits in Malaysia
One of the common problems among Malaysians is to find the credit card that suits their needs and can help them with their finances. If you are confused with the long list of credit cards available in the market, the best option is to benefit from credit card comparison websites like RinggitPlus.
You can view and read all about the best rewards credit card and best cashback credit card in Malaysia before you choose one, instead of visiting the credit card websites separately.
To add to this, RinggitPlus will also reward you with sign up gift (see below) when you apply through RinggitPlus.
You can get a free sign up gift just by applying for a qualifying credit cards with the participating banks: HSBC, Citibank, Standard Chartered, RHB and UOB. The current gifts are as follows:
- Citibank: RM 450 Via DuitNow (8 times spend required – no minimum spend)
- Standard Chartered: RM 300 Lazada e-Voucher
- HSBC: RM 250 Lazada e-Voucher
- UOB: RM 50 Lazada e-Voucher
- RHB: RM 50 Lazada e-Voucher
Visit RinggitPlus Now: ringgitplus.com
Are you ready to make your credit card work for you? It’s time you pave the way for a better financial future for yourself and your family.
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