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A guide to getting your first credit card

Updated 19 Jul 2017 – By Loanstreet


If you are thinking of getting your first credit card, the myriad of choices available in the market would be enough to make your head spin. It's very easy for one to be tempted by the rewards offered by Brand A, or the annual fee waiver from Brand B entices you the other way. You should be very careful and make sure that you've conducted complete research before applying for one.

Bear in mind that there are just too many choices out there for you with confusing details, but the best bet would be to ask from other experienced card holders. Then, with all the information on hand, you can compare everything before taking any action. You can also get a free consultation from our credit card experts to simplify your choices and to hold you back from making any blind decision.

For now, lets just take a look at the tables below of different type of credits cards and how to compare them.

A guide to get your first credit card

Things to Look At When Choosing Your First Credit Card

Remember, your spending habbits, personality and your job status could play important roles in choosing your first credit card. For instance, if you are financially very well-organized and feel responsible enough paying your debts on time, then getting a credit card with reward points and bonuses could be the right choice for you. Or lets say you travel a lot because of your job, then you can think of apply for cash back credit cards for travel benefits and petrol redemptions. Here in below are more aspects that you can look into.

A guide on how to get your first credit card

For Those Who Carry Over Monthly Balances

Look to get plain-vanilla credit cards with the lowest financing interest rates. Because any interest you pay on carry-over balance will offset any perks you could get. Also, compare Easy Pay / Flexi Pay programs which could be useful for larger purchases. You can request a bank to convert a purchase to Easy-Pay / Flexi-Pay scheme, which puts it on a fixed installment plan at a special interest rate.

If you are already carrying a sizable balance, many credit cards also offer Balance Transfer Programs which you should consider. Balance Transfer Programs allow you to transfer your balance from your current credit cards onto the new card at special interest rates.

For Those Who Want To Get Fast Cash Credit card

Your credit card can be used in order to take a cash advance. There are 2 ways. The first is to use your credit card at any ATM to make a withdrawal using the right PIN code. Note that there are 2 costs to consider when using your credit card for such cash advances:

  1. Cash advance fee (Typically 5% of the total amount)

  2. Cash advance interest rate usually 18% per annum calculated on a daily basis.

The 2nd method is to take a cash loan, sometimes known as Easy Cash or Fast Cash or Dial-for-Cash Facility. These loans are taken on your available credit limit, transferred into a current or savings account of your choice, and paid back in fixed installments over a period. They are the equivalent of a “pre-qualified” Personal Loan. Customers wishing to apply for such facilities are required to call the respective banks and make the request.

For The Cost Conscious

Look for credit cards with no annual fees and options to waive government service tax. Other rewards / benefits / programs are secondary.

For The Devout Muslim

Look for Islamic Credit Cards. These cards are usable only for transactions with halal merchants.

For Everyone Else - Lifestyle Factors

If you’re hardly going to carry over a balance, don’t bother with comparing financing interest rates. Instead, seek out credit cards that provide rewards / benefits you actually want. These benefits can roughly be categorized as follows:

  1. Cash Back benefits – Gives a certain % as rebate on credit card transactions. Safest bet for those with no preferences

  2. Petrol benefits – Gives a high % as rebate on petrol purchases. For road warriors and travelling sales people

  3. Travel benefits – Usually comes with frequent flier miles and airport benefits. Best for frequent travelers

  4. Reward Points – Redeemable for gifts and other rewards. For the heavy spenders and shopaholics

  5. Merchant Tie Ins / Co-branding – Special promotional programs with selected merchants. For those with specific wants

  6. Sign Up Rewards – Limited time promotional rewards for signing up a credit card with the bank. If nothing, go for cards with attractive sign up promotions

Other Credit Card Tips

  1. Avoid applying to get too many credit cards at the same time. It paints a negative picture of your credit profile

  2. If you have no credit history in Malaysia (E.g. Car loan / housing loan / personal loan / overdraft facility), have at least 1 credit card. It helps burnish your credit profile

  3. Credit cards have among the highest financing interest rates of all credit facilities. Try to pay off all credit card balances promptly.

Conclusion

When choosing a credit card, one must look into all the various dimensions and then decide which card suits your lifestyle before applying. As long as you remember to pay off your balances on time, getting a credit card can really open you up to a world of convenience and benefits with hardly any drawbacks! 

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