RinggitPlus.com's guide to common words and phrases used to describe banking products. If you don't know what the smallprint means in your banking agreement you can look up the definition here.
Interest that has been earned but has not been paid out (if deposited) or charged (if borrowed).
Affinity Credit Card
A credit card offered to members of groups and organisations that offer special rewards and benefits. Examples might be a credit card offered to government staff or employees of large corporation.
A yearly fee charged for the pleasure of owning a credit card. Many banks waive the Annual Fee for the first year. Some waive the fee for subsequent years provided you make a certain number of purchases on your credit card each month, or exceed a monthly or annual spending threshold.
Malaysian Government funded group that provides financial education, counseling and debt management services. If you’re in trouble with your bills these are the guys to talk to – they offer advice and help. Visit their website at: akpk.org.my
Annual Percentage Rate (APR)
This is the interest that you are charged on your credit card calculated at a yearly rate. Interest on many banking products, such as credit cards, is charged monthly. If your bank charges you 18% APR interest this will work out to a monthly rate of 1.5%.
A fee charged when you apply for a credit card. Yes, some banks still charge you to apply for a credit card. At RinggitPlus.com we think application fees are a bit cheeky - you shouldn't be paying them in the 21st century.
A person who is authorised to use a credit card, debit card or bank account but who isn’t the party responsible for the balance. For example, someone who has a supplementary card is an Authorised User.
This is the amount left to spend on your credit card before you hit your credit limit. If your credit limit is RM5,000 and you have a credit card balance of RM1,000 then your available credit is RM4,000. The trick to owning and using a credit card is not to think of that RM4,000 available credit as ‘money in the bank.’ Instead consider it to be ‘money that belongs to the bank that I can borrow.’
Average Daily Balance
Some banks use an Average Daily Balance to work out how much interest you have to pay on your credit card bill at the end of each month. The Average Daily Balance is calculated by adding every day’s closing balance and then dividing the total by the number of days in your bill cycle.
Bad Credit is what you have if you’ve got a poor credit rating. This happens when you forget to make payments on your credit card bill, or pay late, or go over your credit card limit. Being marked for Bad Credit on your credit card can mean No Credit when you want to borrow some money for something else, like a mortgage.
Bank Identification Number (BIN)
A BIN is the first six digits of a Visa or MasterCard account number. This number identifies the bank or institution who issued your credit or debit card.
Bank Negara Malaysia [BNM] is a Financial Services Regulator. These are the people who write the rules and regulations that govern local and overseas banks. You can visit Bank Negara's website at: bnm.gov.my
Banks must provide a regular statement of your deposit or credit account. This usually shows debts and credits against your account balance. Most banks send monthly statements, many now offer online statements through Internet Banking.
Transferring existing credit card debt to a new credit card that you have applied for with another bank is known as a Balance Transfer. Banks will often offer 0% interest on the transferred balance for a period of time up to six months. Balance Transfer is a great way to consolidate debt and getting your budget back in track but you do need to be careful about how you use the new credit card. Check out RinggitPlus.com’s Balance Transfer pages or view currently available Balance Transfer plans.
Balance Transfer Fee
Beware! Some banks charge a fee when you make a Balance Transfer to a new credit card. It might be a flat fee or a percentage of the amount being transferred. We recommend you check out RinggitPlus.com's list of currently available Balance Transfer plans to understand which plan works best for you.
The period of time covered by your credit card bill or bank statement. Most banks use monthly billing cycles that last between 28 and 31 days.
Bill Pay is a service offered by some banks that allows you to pay your bills online from your current account. Some Bill Pay services allow you to make payments automatically, a great way to manage your budget.
Any bank or company that offers credit cards or debit cards to customers.
Cash Advance Fee
A fee charged when you use a credit card for a cash advance, most commonly charged when you use your credit card to withdraw cash from an ATM. The fee might be a flat fee or a percentage of the amount withdrawn.
Cash Advance Rate
Beware. When you use your credit card to withdraw cash from an ATM you will usually be paying a much higher rate of interest for the money you are borrowing. Most banks charge 18% APR interest on cash withdrawals.
Cashback is one of the nicer things about getting a credit card. Cashback is a rebate on the money you’ve spent, usually credited to your account on a monthly basis. There are many different kinds of cashback offers: some are unlimited; some are capped; and some are restricted to certain goods or services. Make sure you get the cashback card that best suits your lifestyle and spending, check out Ringgitplus.com's Cashback credit card pages to see which offer meets your needs.
A chargeback is what happens when you make a query on your credit card bill; that might be something you took back to the shop for a refund, a hotel charge that you disputed, or in the worse case scenario, a fraudulent transaction. When a charge is disputed your credit card issuer will reverse the payment with the merchant, creating a chargeback. All merchants fear chargebacks.
Assets that secure a loan, credit or any other form of borrowing are known as collateral. In plain language this means you offer something of value to a bank, or lender, as surety that you will pay back the money you have borrowed. If you don’t pay back the money as agreed, the bank, or lender, get to keep the collateral.
Sometimes known as debt collectors, collection agencies are the folk who collect debts that are owed to lenders. Typically hired as a last resort once all other attempts to contact the person owing money, collection agencies make exhaustive (and sometimes aggressive) efforts to get the lender’s money back. If you have trouble paying your credit card debt or mortgage on time we recommend you talk to the lending bank and tell them about your problems. In many cases they will be glad to hear from you and happy to work out a new payment arrangement.
Understanding how you pay for money that you borrow is one of the most important things you need to learn before you sign up for a credit card. It’s hard to find any financial institution that wants to explain Compound Interest in plain language. Typically a bank provides this sort of explanation:
“Compound Interest is calculated on both the accumulated interest and the principal balance in the account. The more frequently interest is compounded, the higher the effective yield.”
We’ll forgive you if you don’t understand exactly what that means - we didn’t either the first time we read it. Lets’ try another way to explain this. If you don’t pay your credit card bill in full every month your bank will charge you interest on the balance outstanding. This interest is then added to the total amount that you owe the bank on your credit card (called ‘the principal’). This is compounding the interest. If you don’t pay your credit card bill in full before it’s due date the following month your will pay interest on the original amount outstanding + the amount of interest that was added on the previous month’s bill (and whatever you spent that month). You can see how quickly you can get yourself in serious debt if you don’t pay your credit card bill every month but continue to use your credit card. Unless you can make big payments against your debt you'll only be paying off the interest, never the money that you borrowed. If you’re worried that having a credit card is too much of a temptation, have a look at Islamic Banking Card-i products which do not apply Compound Interest.
A credit card is a payment card which may be used to buy things online and at millions of merchants worldwide. Credit cards are generally made of plastic. In the old days credit cards just had a magnetic stripe on the back which contained coded information about your account. In the modern day, credit cards also carry a small computer chip which holds a heap of information about you and your credit card account. Money spent on your credit card can generally be paid off over time but your bank will charge you interest for the privilege of borrowing money. RinggitPlus.com indexes every credit card in Malaysia, helping you choose the right card for your needs, saving you the most money.
Your credit limit is the maximum amount of money that can be borrowed on your credit card. Just a reminder: try not to think of your credit limit as ‘money in the bank,’ think of it as ‘money you can borrow from the bank.’
Your credit rating is a score calculated by credit bureaus and banks based on your payment history, income, employment and other factors that predict your ability to pay your debts. The better your credit rating the more money you’ll be allowed to borrow.
Daily Periodic Rate (DPR)
This is your Annual Percentage Rate of interest [APR] expressed as a daily rate. Divide your APR by 365 and that is your DPR.
Are you a deadbeat? If you pay your credit card bill on time every month you are most definitely a deadbeat. This rather unflattering term is what people in the credit card industry call customers who are smart with their money and never pay any interest. If you never pay any interest the bank makes no money from you.
Money that you pay into the bank is a debit. Money that you take from the bank (whether it’s yours or borrowed) is a credit.
A plastic card that you can use to make point of sale and online payments and millions of stores worldwide. Money spent on your debit card is immediately deducted from your bank account. Available credit is limited to the amount of money in your bank account. It’s like a credit card without borrowing or interest payments. Some Malaysian debit cards offer benefits such as cashback and reward points, if you’d like to know which debit card best meets the needs of your lifestyle. RinggitPlus.com indexes every single Debit Card in Malaysia. See which one saves you the most money.
This is a transaction set up with your bank that lets you to make one-off or regular payments to someone else’s account. Most commonly used to pay utility bills, direct debits are also useful for managing any fixed monthly or annual outgoing. Choose the date on which you want the payment to be made, and the money will leave your account on that day. Easy budgeting.
The bad thing about all bills is that they have a due date, the last day on which you can make a payment before you are charged penalty fees or a higher rate of interest on your debt. Paying bills late every month will also affect your credit rating, your credit score will drop and you may find that you're not able to borrow money from the bank.
Electronic Funds Transfer at Point of Sale
Any transfer of money made by and electronic device at a shop, restaurant, hotel, etc. Payment may be made using a credit card or a debit card, authorised by entering a PIN or signing a receipt.
In banking this generally refers to encoding personal information for secure transmission across the Internet.
Fees and Charges
It seems like all banks provide us with fees and charges and sometimes it might seem as if you will never escape them. RinggitPlus.com exists to help you save money and reduce fees and charges. RinggitPlus.com lists the fees and charges for every single credit card in Malaysia.
Fixed Rate Interest
This is a fixed rate of interest that will not change throughout the life of your agreement with a bank. You’ll most commonly find fixed rate interest associated with mortgage products. Fixed rate interest can be a good thing and it can be a bad thing, it all depends how the money markets are performing. If you take a mortgage when interest rates are very low a fixed-rate might be a great idea. The opposite of a fixed rate interest is floating interest which changes as the general interest rates in the market change.
Fixed Rate Loan
This is a loan where the interest rate and the payment amount remain the same over the life of the loan. You make equal monthly payments of principal and interest until the debt is paid in full.
Flexi Pay Plans
Traditionally, if you wanted to buy something you couldn’t afford to pay for outright you’d either have to do without or sign up to some outrageous hire purchase agreement. These days Flexi Pay plans offer an alternative for buying things that are beyond the means of your budget by spreading a payment over several months at a low rate of interest (and sometimes even interest free). Most banks offer flexi pay plans with their credit cards that are really simple to use. Just buy the thing you want with your credit card, then call the bank and ask them to convert that purchase to a Flexi Pay loan. Ringgitplus.com lists all currently available credit card Flexi Pay plans in Malaysia, making sure you have the information you need when you apply for a loan.
Foreign Transaction Fees and Foreign Exchange [Forex]
These are fees you might pay to your bank when you use your credit card or debit whilst travelling overseas. The foreign transaction fee is charged most often charged when you use an ATM to withdraw local cash. Forex is the exchange rate you pay for converting your Ringgit into that foreign cash.
Nowadays fraud alerts are an essential feature that must be provided by your bank – it’s the law. Your bank should be able to offer you SMS transaction alerts right now, this will keep you safe when you’re shopping online, overseas and even out and about in the city.
There are no rules published by the banks that can tell you how you get a good credit rating, working out what kind of behaviour a bank might judge to be a measure of your creditworthiness is quite tricky. Some people believe that those who borrow a lot of money, don’t pay off their credit card bill in full and make interest payments but never settle a bill late have the best credit rating of all because they make the bank the most money. We’re not so sure about that. If you use your credit responsibly, pay bills on time, and do not have an unusually high amount of credit card debt chances are you are taking the best course of action to ensure that you have a good credit rating.
Most credit cards offer 20 days interest free between the statement date and the payment due date. This is known as a grace period. Sometimes the grace period will refer to the period between the date a purchase was made and the payment due date. Either way, if your bank doesn’t offer you a grace period on your credit card you need to change your credit card provider. RinggitPlus.com lists the grace period for every credit card in Malaysia, helping you make the best choice when you make a credit card application.
Someone who agrees to be responsible for repayment of money borrowed by another person. If you go Guarantor it will mean you’re liable for paying someone else’s debts if they default on a loan. Tread wisely.
Interest is a charge applied by banks for lending you money. Generally, interest is is calculated as a percentage of your balance.
A fee charged as interest on credit card borrowing. Banks work out your interest charge by multiplying your credit card balance with the daily interest rate then multiplying that figure by the number of days in your billing cycle. If there are transactions for which no grace period applies and the credit card bill was not paid in full the previous month an interest charge will apply. If you always pay your bill your full credit card bill within the grace period should not ever pay any interest. If you're looking for a low interest rate credit card RinggitPlus.com lists every single low interest rate credit card in Malaysia, making sure you make an informed decision when you apply for a credit card.
When you don’t have any money left in your bank account or overdraft, or you have reached the credit limit on your credit card you have insufficient funds.
Many credit cards include an introductory offer providing you with lower than normal interest rates for a period of time, a cashback bonus, or a rebate to help you meet the cost of your annual government service tax. Watch out for ‘special offers’ that waive charges you shouldn’t be paying anyway (should you really be charged an annual fee just for the privilege of being a abnk customer?), they’re useful but sometimes have fees stacked elsewhere to make up for the generosity. If you want to keep on top of all the latest offers stay tuned to RinggitPlus.com or sign-up for our newsletter.
Business dealings done in accordance with sharia principles. Essentially, sharia prohibits the payment and acceptance of interest in all financial transactions. It also prohibits investment in businesses that provide goods or services that are contrary to Islam, such as gambling
The party that provides cardholders with their plastic cards. Issuers may refer to banks, credit unions or any association member financial institution.
Late Payment Fee
A penalty fee that is charged to you for failing to make your payments by the due date. To be avoided at all cost.
A black magnetic stripe that can be found on the back of your credit card or debit card. This stripe contains all your account information and allows you to make transactions electronically via machines such as ATMs and credit card readers.
The responsibility for the repayment of the account balance of the credit card falls with this person. The main user of the account. In banking terms the main cardholder is the first person they go to when seeking credit card payments.
A minimum amount that must be paid off your credit card bill every month.
Interest that is charged to your credit card balance. This figure is calculated based on your statement closing date and multiplying the Average Daily Balance on your account by the Interest rate (the Annual Percentage Rate divided by 12).
When you take on a loan for a property it becomes collateral for the lender. Should you fail to pay back your loan the mortgage gives your lender the right to seize possession of your property.
A loan that is granted to you by a financial institution for the purpose of purchasing real property.
The party that lends the money in a mortgage loan relationship.
The party that receives the loan to purchase a property. Remember that the property will be used as collateral until you pay back your loan in full.
Payment Due Date
Essentially the ‘expiry date’ for your credit card bills. Failure to fulfill the payment will incur interest charges on future transactions. We all hate deadlines but we hate losing money even more so please pay attention to your bill due dates.
A convenient payment feature from Mastercard®. Paypass allows you to make transactions simply by tapping your PayPass-enabled credit card at the stores’ checkouts. You don’t even have to swipe or insert your credit card as the reader will scan it from the microchip and radio antenna that is embedded into your plastic card.
Payment Protection Insurance (PPI)
An optional insurance scheme that protects you should you fail to meet your credit card payments due to illness or redundancy. Should this unfortunate situation happen your insurance provider will help you bear the brunt of your debts by either paying a percentage or providing assistance in paying your monthly bills.
Fees that are charged to you should you violate the terms of agreement or other requirements when you registered your account. For instance failing to make minimum payment on your monthly credit card bills or going over your credit limit. In short this is something you will want to avoid at all cost if you want to stay out of debt.
The periodic rate determines the amount you are charged for each billing period. Credit card plans usually calculate your periodic rate monthly and is worked out by dividing the APR by twelve.
Personal Identification Number (PIN)
A 4 to 6 digit password personalized to your chip-enabled credit card. Some merchants are moving towards PINs to complete transactions instead of using the cardholder’s signature. Like email passwords you should never reveal your PIN to anyone.
Point Of Sale (POS)
Store locations set up by established merchants where payment and services of their products are made available.
Premium Credit Card
Higher end credit cards that often offer higher credit limits in addition to additional perks such as travel insurance, emergency services or club memberships. Some also double as rewards cards with cash back schemes and travel points. If you want some of the finer things in life RinggitPlus.com indexes all of Malaysia's premium credit cards helping you make an informed decision when you make your credit card application.
A special discounted rate of interest offered on a short term basis after which a standard rate of interest will commence.
A service provided by financial institutions which allows users to withdraw cash which is then charged to their credit card.
Any payment that is returned as unpaid to the account holder for any reason, this includes any related interest charges.
A hard copy document which records any point of sale transactions specifying date, amount, product/service description, primary account number and the name and locale of the merchant.
A reimbursement to the account holder possibly due to overpayment or return of a previously sold product.
Benefits and incentives offered by credit card companies to entice consumers to sign on and use their credit cards more often. Some of the perks of these reward systems include cash back programmes, discounts for certain merchants, point redemption offers or gift cards.
Retail Credit Card
A credit card which is tied in with certain retail stores. Some credit cards are more flexible and will allow the card holder to use it in other store locations.
This term describes customers who pay off their balances off gradually over time, also referred to as “revolving” their balances.
A hard copy record which serves as evidence of any purchase of goods or services made by the cardholder.
A deposit account which benefits from interest with the exception that withdrawal of funds cannot be made via check.
The Goods & Service Tax is a consumption tax placed on a wide range of domestic & international products, goods and services. It encompasses tax impose on every process of the production, from the raw material to the final product and the labour that is required to market and sell it. Thus GST affects many aspects of business and consumer behaviour as it weighs in on the final price of products and services.
A one-time fee that may be charged upon opening your new credit card account. Like Application Fees we look upon these with raised eyebrows.
Refers to financial institutions that provide products and services which adhere to Shariah principles or Islamic values and practices. Islamic banking systems differ in terms of acceptance of interest rates on loans and prohibits investments into business which are contrary to Islamic principles such as alcohol consumption.
A one-time beneficial offer made by financial institutes to entice customers into signing on to either a new account or credit card. The most common example of signup offers are annual fee waivers for new credit cardholders for X amount of years.
A detailed monthly summary of your spending. It will allow you to keep track of your credit card debt as well as the due date which you should be making your (minimum) payment.
The cut-off date for your monthly statement billing cycle. Any transactions after this date will be rolled over to next month’s statement. Just because you’ve cleared your credit card debts this month doesn’t mean you should go crazy this weekend. You might have previous spur of the moment transactions that are still pending.
Special credit cards made available from various retailers which are tailored for use in that particular store.
Basically your secondary credit card that will be charged to the same account.
A form of insurance based on Islamic principles. Takaful employs a co-operative system where members contribute to a money pool which then reimburses each person against losses and damages. The basis of shared responsibility from Islamic culture is the foundation for mutual insurance systems.
A transaction that is pre-charged to your account but which is not yet approved. This value is deducted from your credit balance. Temporary authorisations usually go through as ‘posted transaction’ after a few days. However in cases like hotels where customers who didn’t use the mini bar or make additional charges, the temporary authorization may be nulled.
A rewards system calculation which is usually categorized in tiers and presented as “up to” a certain percentage cash back. Typically the higher the tier the more percentage of rewards will be offered, up to a maximum amount advertised. For instance an offer could be advertised as up to 1% cash back with .25% for the first $1500, rolling up to .5% for the next $1500 and 1% for all spending >$2000. RinggitPlus.com has a complete list of Malaysia's Rewards credit cards.
Some credit cards provide the perks of travel protection insuring against unforeseen circumstances like emergency medical, delayed/ lost baggage, free lodging for cancelled flights, etc. To benefit from this type of coverage however some companies require that the full cost of a trip, tickets and/or related purchases be charged to the credit card.
Unsecured Credit Cards
These types of credit cards are not secured by collateral. Users of these credit cards need to be assessed by their credit history, financial strength and earnings potential.
These types of interest rates may change throughout the term of a loan, line of credit or deposit account. It would be in your best interest to keep up to date in case any of these changes are not working to your benefit.
Transaction information that has been deleted.
Voided transactions are nullified recordings that are still pending. In this case the transaction is removed from the other batch of transactions to be settled.