Are you thinking of getting a credit card? It’s an intimidating decision, especially if this is your first time getting one. But never let that scare you! Credit cards are a great way to kick-start a blank credit record while teaching you proper money management. Before that, however, it’s important you have a good understanding of credit cards as well as what to look for if you’re getting your first one!
Before you get over excited about applying, you need to make sure you’re eligible for it. Most credit card for beginners requires a minimum annual income of RM 30,000 in Malaysia.
With credit cards, the higher the annual income you have, the better benefits and bonuses. However, don’t be discouraged if your annual income is on the lower end for now. Some cards are open to those with lower annual income such as Affinbank Mastercard Classic. Their minimum requirement is RM24,000 per year or RM 2000 a month.
On the other hand, if you have a high annual income, you are offered more options to choose from.
However, if you happen to juggle other financial responsibilities such as car loans or student loans, you might have a chance of getting your application rejected if they’re not paid on time. If your loan balances are high and you’re not paying them back consistently enough, most issuers will be hesitant to accept your application. This is in case you are unable to pay them back. So make sure you have consistent and clean debt-repayment records in order to gain better credit scoring with the banks.
Not necessarily. You also need to have some sort of credit history to apply for a card. Not having any credit history at all means you’ve never borrowed money in the past – either for a student loan, car loan or house loan. This can make credit card issuers hesitant because they don’t know whether you’re capable of paying back consistently.
Here’s a method to build your credit history if you’re starting from scratch. This is for those of you who never had any loans or debt repayment history including PTPTN/study loans.
You don’t want to be too overwhelmed for your first credit card so look for these tips before you start applying!
|Annual Fee||Free annual fee for the first year; OR free annual fee for life|
|Interest Rate/APR||Lowest interest rate|
|Balance Transfer Interest||Lowest interest rate; OR lowest transfer fees|
|Cash Withdrawal||Lowest interest rate; OR lowest withdrawal fees|
|Bonuses (This depends on what you usually spend on, and what you hope to benefit)||Cashbacks/ Rewards points/ Travel benefits|
The range for annual fees can go from RM90 to RM800, depending on the type of credit card you want to apply for. If you’re living off a fresh grad salary, consider a credit card with “free for life” feature – you won’t have to pay a single cent at all – or one that offers free annual fee for the first year.
To reduce the chances of you drowning in debts you can’t pay, try looking for one with low interest rate per annum. Typically, the interest rate is between 10% to 15% so try to find one with less than 15%. A good example of this would be BSN Classic Visa credit card. Their interest rate is 13% and the annual fee is free of charge.
Let’s say the interest rate for your first card is 15% and you want to pay down the credit card debt.Try to find one card with low balance transfer rate to shrink your overall debt and save you some money.
This is very dependent on your lifestyle preferences. If you like to travel or your work requires a number of overseas trips, look for cards that offer great travel rewards. Or if you like shopping, consider opting for rebate benefits.
One of the main reasons to get a credit card is to boost your credit. Which is why you need to be a smart credit card user.
Bad credit results from late payments or partial payments. When you have bad credit scores, this may prevent from taking future loans or applying for another credit card. So, to make sure your credit activity helps as much as possible, pay in full and on time every month and stay well below your credit limit.
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