Description
A credit card is a financial tool that allows users to spend f irst and repay later, issued by banks or financial institutions. Cardholders can use it within a set credit limit for purchases, cash withdrawals, or installment payments.
1. Key Features of a Credit Card
' Spend now, pay later (within the credit limit)
' Interest-free period (usually 20-50 days)
' Minimum repayment requirement (interest applies if not fully paid)
' Used for daily spending, online shopping, and international payments
' Rewards programs, cashback, air miles, and other perks
2. Main Types of Credit Cards
Rewards programs, cashback, air miles, and other perks
2.1 Standard Credit Card
- A basic card for general consumers, offering interest-free periods, minimum payment options, and standard rewards.
2.2 Cashback Credit Card
- Ideal for frequent spending on fuel, dining, groceries, and shopping
- Provides 2% - 10% cashback on transactions
- Examples: Maybank 2 Gold Card, CIMB Cash Rebate Platinum
2.3 Travel Credit Card
- Offers air miles, airport lounge access, and free travel insurance
- Examples: Citi PremierMiles, HSBC Travel One Card
2.4 Islamic Credit Card
- Shariah-compliant, following Islamic banking principles
- No interest (Riba), only management fees (Ujrah)
- Examples: Bank Islam Card-i, Maybank Ikhwan Card
3. Credit Card Eligibility Requirements
' Minimum Age: 21 years and above
' Minimum Monthly Income: RM2,000 - RM5,000 (varies by card type)
' Good Credit Record (CTOS/CCRIS Score)
4. Credit Card Fees & Important Terms
' Annual Fee – Some cards are free, while others charge RM100 - RM800
' Interest Rate – Usually 15%-18% per year (if the full amount is not repaid)
' Minimum Payment – 5% of the bill or RM50 (whichever is higher)
' Late Payment Fee – RM10 or 1% of the unpaid amount (max RM100)
' Foreign Transaction Fee – 1%-3% (applies to overseas spending)
5. Advantages & Risks of Using Credit Cards
Advantages of Credit Cards
' Convenient for emergencies without needing cash upfront
' Interest-free period (up to 50 days)
' Earn rewards such as cashback, gifts, and travel benefits
' Helps build a good credit score if used responsibly
Risks of Credit Cards
'L High interest rates – If unpaid, interest can reach 18% per year
'L Encourages overspending – Overspending can lead to debt problems
'L Late payments affect credit scores – Can impact future loan applications
6. How to Use a Credit Card Wisely ?
' Pay in full every month to avoid interest charges
' Choose the right card (travel, cashback, no annual fees)
' Use only within 30% of your income to manage debt responsibly
' Avoid making only the minimum payment to prevent accumulating interest
More detail about YCE PRESTIGE MANAGEMENT PLT
Malaysia
