1) Use them anywhere
Like traditional credit cards, prepaid credit cards are accepted all across the world. All you have to do is look out for the symbol of the body which handles your cashless transactions — usually VISA or Mastercard — on a payment terminal, and you’re good to go. No special machines or elaborate processes are needed. You’ll also be able to enjoy perks like other cardholders, or some unique rewards that are meant only for users of a particular prepaid credit card, like the CIMB Lazada Prepaid Mastercard.
2) Open to both locals and foreignersUnlike traditional credit and debit cards offered by Malaysian banks, prepaid credit cards do not require their owners to be strictly Malaysian nationals. Many of their providers are happy to extend their services to both locals and foreigners residing in Malaysia, as long as they are able to provide a valid Malaysian mailing address when submitting their applications.
Prepaid credit card owners can be as young as 18 years old as well — or in the case of the Sogo-RHB Prepaid Card, 12 years old!
3) No income statement neededNo, Malaysians, you don’t have to be suspicious of the fact that this sounds like what a loan shark would say.
Prepaid credit cards are not usually associated with minimum income levels, which is why you will be not be asked to submit income statements when applying for them. This is also why they are extremely useful for students or freelancers who aren’t earning a fixed or regular income, but would still like to enjoy the ability to make cashless transactions.
4) Use only what you haveIf you can’t resist the temptation of good sales, like most Malaysians, getting yourself a prepaid credit card might be an especially good idea.
Much like how you would operate a prepaid mobile phone line, prepaid credit cards only allow you to spend according to how much you have stored in them — so, if you load RM500 into your card, you’ll only be able to use it to make a maximum of RM500 in transactions. There is a limit, though, to how much you can have stored in these cards. The Maybank VISA Manchester United Prepaid Card, for instance, has a cap of RM10,000 at most.
This certainly sounds like a good way to carry fairly large sums of money around without worrying about spending excessively.
5) Withdrawals at a costIf you find that you’re in urgent need of cold hard cash while buying vegetables from that lovable auntie at your local market, don’t panic.
Head on over to a nearby ATM and withdraw money from your prepaid credit card instead! These withdrawals will be deducted directly from the amount you have stored in the card, and will be performed without any charges as long as they are done through ATMs belonging to your card’s provider — unlike traditional credit cards, which commonly impose a charge of 5% or RM20 (whichever is higher) for each withdrawal that they are used to make.
You can also withdraw money from the ATMs of other banks and card providers through the CIRRUS or PLUS networks, but doing so will incur a charge of RM10 per withdrawal.
Is a prepaid credit card something you should consider?There you go! Five traits of prepaid credit cards that you should keep in mind when considering these financial instruments. Remember that these traits also make them more suitable for some groups of people too, like foreigners residing in Malaysia and students, but also render them less apt for others.
For example, if you are an individual or business that makes extremely large transactions regularly, prepaid credit cards are probably not right for you as you would have to make frequent trips to ATMs to continuously top-up your card. On the other hand, if you are a small business that only spends around RM5,000 a week on average, and would like to do so without carrying massive wads of cash in your pockets or bags, a prepaid credit card would come in handy.
So, is a prepaid credit card the perfect gula Melaka to your cendol, or would a traditional credit card suit you better? Compare them side-by-side and decide for yourself through Loanstreet’s very own vault of information on credit cards in Malaysia!