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Can Your Credit Card Really Save You Money?

BY Team Loanstreet

Updated 18 Nov 2019

The seriousness of credit card debts can never be belittled! At a minimum 15% rate of interest, accumulated debt can be your source of money drainage. Have you hear about a credit card balance transfer program though? It could prove to be of value to you.

What's covered in this article?

What is a Credit Card Balance Transfer Program?

The balance transfer program involves transferring incurred debt in existing credit card account to another credit card with a lower interest rate. Most banks offer this facility but each may have different terms and conditions set up.

How Can It Benefit Me?

Let’s look at a hypothetical scenario

You splurged RM10,000 on stuff you didn’t have money to buy. (with your credit card of course)

Lucky for you, RM3,000 came your way of which you used to clear your credit card debt.

Now, you’re left with RM7,000 worth of debt to clear at 15-18% interest.

So you apply for a credit card that offers a 6 month 0% balance transfer program.

Assuming no payments were made, you hypothetically save RM 525 (7,000 x 0.15 x 6/12) worth of interest over 6 months

What do we need to know about it?

Transfer programs comes in all shapes and sizes but lets take a look at 2 of them.

Type A: Easy payment

Debt repayment can be made any time within the balance transfer period. Following the example above, you can pay off your RM7,000 in debt whenever, as long as it is within the first 6 months. After that, the interest rates reverts back to the usual 15 - 18%.

Type B: Fixed payment

Fixed payments is as literal as it comes. Every month, you pay a fixed monthly sum to the bank. In the same scenario as above a monthly repayment sum of RM 1,166.67 (7,000/6). If this requirement is not met, the balance of the transferred amount will be subjected to interest

Things to avoid when using this program

An interest rate of 0% with no catch?!
Before you ditch your savings plan out the window, do know that free loans drop fall into your lap for no reason.

0% only applies as long as the terms and conditions are met.

Here are 2 examples that you might want to know.

i) Early Repayment Penalty Fee

You have just received a residual check for a short business trip. Instead of blowing it all on more stuff you don’t need, you decide to pay off your credit card debt.

Lo and behold, you are slapped in the face with a RM100 penalty fee for clearing debt.


Not really. Under a fixed payment program, you pay accordingly for a full period or get fined for doing otherwise.

Just place that extra dough in your savings account and earn some interest instead.

ii) Retail Spending

It is not advisable to use your new balance transfer credit card for any other purpose. The whole point of moving your debt to another credit card is to take advantage of the low interest rate and ensure debt repayments are made within the timeframe. Retail spending piles on the pressure even further.

This phenomenon can be seen as a trade off but ultimately, it’s recommended that the new credit card should only include balance transfer.


Being an ordinary consumer will not get you anywhere. The savvy has and will continually take advantage of great deals and offers. We hope to share more tips in the future so do stay tuned in. Visit our credit card section to compare and apply for the best credit card deals available in Malaysia today.

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About the Author

Team Loanstreet

Run by a professional human-sized team, get resourceful tips & guides from our very own library of financial articles that can help improve your financial lifestyle & make a well-informed money decision. We strive to provide you with the best service in helping you to get the most out of that DUIT!


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