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9 exploitable loopholes to use on banks

Updated 19 Oct 2018 – By Loanstreet

Most people would describe banks as blood suckers, sharks, predators, daylight robbers, etc. But did you know that there are certain loopholes in the system which you can use to turn the tables on banks? Once you learn these, you can not only prevent them from milking your money, but even take money from banks in ways that you probably shouldn’t!

Here are nine loopholes you can exploit:

1) Use your credit card like a charge card

Thanks to monthly billing cycles of credit cards and payment grace periods, depending on the day of the month you make a transaction, you can enjoy anything from 15 - 50 interest-free days just by using your charge cards / credit cards. It’s like buying something, but only paying 50 days later! 

So instead of using cash for all your transactions, use your charge / credit card if possible. Just remember to pay it off in full whenever the statement is due!

2) Use reward cards / Cashback credit cards

As if 15 - 50 interest-free days aren’t good enough, using a cashback credit card essentially gives you a discount on ALL the transactions you make via credit cards. For those who prefer reward cards, you could say reward points count for a cash equivalent.

Bonus Tip #1 – Pay your monthly bills as late as possible using credit cards.

Most phone and utility bills have a 30 day grace period. Paying them with your credit card on the last possible day stretches the total number of payment-free days for you to 45 - 75 days.  

3) Cancel and reapply credit cards before just before one year

Most banks today offer to waive off the annual RM50 Service Tax if you apply a new credit card with them. Exploit this by cancelling off your existing cards just before the one year period to ensure you never have to pay any more taxes on your credit cards.

4) Perform IBG transfers on business day mornings

Whenever you perform an Interbank Giro (IBG) transfer, banks will deduct the amount from your savings account immediately. No interest earned on that amount for the day. Yet, IBG transfers are only processed on the mornings of every business day (this means only Mondays to Fridays, except public holidays). So if you transferred the money on a Friday evening, you would have lost the interest earned for 3 days.

Instead, try performing the IBG transfer on the morning of the business day you want the money transferred. This ensures no loss in interest earned.

5) Use online FD placement and upliftment with RHB

Fixed Deposits (FD) give better interest rates. Yet, most people still park their money in savings and current accounts for its convenience and liquidity. FDs suffer the drawback of having to be at the bank in person to withdraw the money.

RHB Now makes it possible to make FD placements online. Even more importantly, it allows for FD upliftment via internet banking. No need to be at the bank in person.

Exploit this to earn up to 40X more interest by putting your money into FDs. Just uplift into your savings / current account using online banking, and withdraw from it just as you normally would whenever necessary.

Bonus Tip #2 – Place your FDs in small separate chunks.

This way, if you have to uplift the money, you can uplift them in parts as required, preventing lost interest earned on all of your money.

6) Put money into chequing account at the last minute

Current accounts are typically non-interest bearing accounts used for issuing cheques. Transfer money into the chequing account only when you are expecting a cheque to be drawn on your account. Just remember to make sure there are sufficient funds when the cheque is cashed to avoid the RM50 – RM100 penalty!

7) Pay home loan installment as early as possible in the month

If you have a housing loan, pay the installments as early as possible in the month before the due date to save on interest payable. This is because mortgages in Malaysia follow the daily rest on reducing balance interest calculation.

8) Pay your car loan & personal loan instalment as late as possible in the month

On the contrary, do the opposite when paying your car loan and personal loan installments. Pay it only on the due date for the month. This is because car loans and personal loans repayments follow the simple flat-interest calculation method.

9) Use comparison sites like Loanstreet to find the best product fit

Whether you're on the look-out for a home loan, home refinance, a personal loan, or a credit card, you no longer need to walk into banks to listen to one-sided sales pitches. In Loanstreet, we offer you quick and user friendly tools such as the home loan comparison tool, home loan refinancing comparison tool and personal loan comparison tool. Exploit these tools to find the best products for your needs!

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