Do you need a Credit Card?
By: Jason How Zhi Yeong
Tags: Money, Credit Cards, Personal Finance, Financial Planning, Cash Flow

A lot of Malaysians are confused with the sea of credit cards available in the market and often do not understand the features of the different credit cards. Before we get to the topic of choosing which credit card, let me share what are the benefits of having a credit card.

Convenience & Cashless

With a credit card at hand, you can leave the house without worrying how much cash on hand. It is convenient when you need to make a large purchase, you do not bring a bunch of cash notes with you for shopping (some even provides the option of spreading the cost over several monthly payments at an interest rate). With more and more retailer stores going cashless and online, a credit card would be eventually needed to pay for bills in the near future.

Structured Tracking

Besides that, it also provides useful record of your spending through your monthly statement and online account. Your purchases get recorded online with all the essential information — where, when, how much, and how often you’re spending, this is especially helpful if you need to make monthly business expense claim. When you make a credit card purchase, your money remains in your current account until you pay your credit card bill.

Benefits & Rewards

Nowadays, some cards now offer 5% or even as much as 10% cash back on selected purchases such as Petrol, Grocery, Dining, Shopping and etc though involving minimum monthly spending. Some cards provide bonus points for certain categories of spending like restaurants, groceries or travel; points can redeemed for gift cards from retailers and restaurants, or for merchandise items through the credit card company’s online rewards portal.

Building Credit Score

Many people do not know that not owning a credit card could possibly affect their credit score (if you have a credit score). Without an open or active borrowing facility on your credit report, you are likely to not have a credit score at all and this makes it more difficult to get approved for mortgage loan, car loan and etc. In Malaysia, credit card is one of the easier credit facility to apply and get approved, making them a good option to establish and build a good credit history. On time credit card payments help boost your credit score while late payments will bring your credit score down.

Important Advice

It may sound like there are a lot of benefits of owning a credit card but many people have advised to not use or own a credit card. Reason being is that some individuals have overspent the credit card irresponsibly to purchase things that are beyond their financial capability, causing them to end up with debt. If you do NOT pay your credit card bill timely, credit card providers may charge your outstanding balance with high interest rates as high as 18% on daily basis. Hence, it is always important to use your credit card RESPONSIBLY in a disciplined way. Always pay your credit card bill on time!

Choosing a Credit Card

For a start, I recommend to get a Cash Back Credit Card. As easy as it sounds, it provides cash back on selected spending categories depending on different credit cards.

Citi Cash Back Credit Card

There are 2 types of Citi Cash Back Credit Card:

Citi Cash Back Platinum Mastercard (Min Spend of RM1,500) Citi Cash Back Mastercard (RM500)

The 2 credit cards provides 10% cash back on the following categories with a monthly cash back cap per category (RM15 for Platinum, RM10 for non Platinum), allowing you to enjoy cash back up to RM60 per month (RM720 per annum).

Petrol Grocery Grab Dining

In general, most of you will spend on these categories on a monthly basis. Hence, it is good to start with this cash back card to earn up to RM720 cash back per annum.

On a personal experience, I have been using Citibank Cash Back Card since I started working. Citibank has been giving me the best customer experience compared to other credit cards. For example, they have been revising my credit card limit upwards along my customer journey (subject to some criteria); this is something that none of my other credit card provides. You may think having a credit limit increase isn’t a big factor, but having the same credit limit and 10 years could be a big difference; imagine your credit limit is RM10,000 now and it would be the same RM10,000 if your credit card provider does not upgrade your credit limit. Hence, it is important to have a credit card that can grow together with you along with your career.

And of course, Citibank has the best customer service whenever I have any issue.

Notes: For more details, you may refer to the Terms & Conditions.

Apply your Citibank Credit Card via this link to enjoy the benefits below:

3 Year Annual Fee Waiver (upon approval) Up to RM450 TNG eWallet reload PIN (upon activation & spend) RM200 cash back (when you enrol to Auto-billing)

Notes: Subject to Citibank Terms & Conditions and availability.