Key things to look for when choosing your first credit card

Updated 26 Jan 2018 – By Loanstreet


Today’s lifestyle often demands an adaptation to swift and efficient ways of financial dealing. A majority of people find it risky to carry large amounts of cash with them all the time. Hence, credit cards have become increasingly popular among Malaysians, especially the youth.

Often the wide range of credit cards available in the market can be confusing to the general public, more so if someone is trying to select just one. Another issue that a fresh graduate or someone who is just entering the workforce may face is that the majority of banks or credit issuers may hesitate to issue primary credit cards to them. 

This can be boiled down to a few factors, namely one’s age and income. If you do not meet their minimum age requirements or have an income that is below the prerequisite level, then you’re bound to face a few setbacks. Under these circumstances, it’s best for you to start by applying for a supplementary credit card, which can be issued if one of your parents is already a primary card holder.

There are benefits to getting a head start in the credit card game and securing a safe mode of payment. You have the opportunity to learn how to manage your money independently. In times of need or when you are away from home, you can have easy access to cash as it can make fast transfers or payments should any emergencies crop up.

When you are looking for a supplementary card, you should choose one without an annual fee and preferably has a 0% introductory APR (annual percentage rate, otherwise known as ‘interest rate’) for the first few months followed by a low APR regime. This sort of benefit allows you to purchase goods and services using your credit card, but you won’t get charged any interest rate, usually only for a specific amount of time.

Additionally, supplementary cards – which provide rewards in the form of points or impressive cash value – are a huge plus for you as you will receive a certain percentage of cash back on your spending followed by a lower credit line. Individuals with a good sense of savings and budgeting can even generate some earnings from cash back values.

Once you advance further on your career path and start to earn a much higher and steadier income level, you should opt for a primary card of your own. When you are hunting for the right credit card, you should always look for the ones that have benefits which exceed your fees and charges. Always focus on either a low interest rate or the least annual fee payable, as these are the charges you cannot avoid once you start using the card.

Out of the various types of primary credit cards available on the market, the most beneficial for most people would be the Rewards Points type and the Cash Back type. These types of credit cards not only add value to your daily spending, but also provide returns on your purchases of products and/or services, which can easily boost your savings.

While both may seem similar in the way they work, a rewards points credit card is the best way to earn hundreds of Ringgits worth of goodies (products and/or services). You can do so merely through everyday spending (you’re awarded reward points for every Ringgit spent). It sounds like a great premise; who doesn’t love getting something for nothing?

For cash back credit cards, the incentive for the card issuer to offer such a benefit is to encourage people to spend more through swiping. Depending on the issuer, your cash back may be in the form of a flat rate of return per purchase; others have additional rates depending on where you shop (usually well-known brands), which allows you to potentially maximise your cash back.

Be wary of one major pitfall though: carrying over a balance on your card will be charged interest, and that will certainly mess with any benefit which even the best schemes have. However, if you can manage to remain debt-free by paying off your card each month, then you’ll not only be able to enjoy additional benefits, but build up/maintain a healthy credit profile and score, among other things.

To conclude

At the end of the day, what determines the best credit card for you… is yourself! Find out what are your needs, habits and credit history. Once you get a good piece of plastic that is the right fit, you can slowly build your credit score for added benefits, which reflects both your past and present financial decisions.

Your transition from using a credit card under your parents’ reference to owning a credit card of your own will be smooth and successful and you will be in command of both your savings and debt.

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