6 things you must know about credit card terms and conditions

Most people don't read their credit card terms and conditions when they apply. If you aren't fond of small print make sure you know how to check the most important things that you're agreeing to.

Do credit cards terms and conditions confuse you? Don’t worry, you’re not alone. There are many who’ve applied for credit cards without reading the terms and conditions and even more who still can’t make head nor tail of the small print.

The good news is that most bank contracts are written in a similar fashion and once you’ve familiarised yourself with some key terms you’ll be able to sniff out all the important details.

These are some important points you’ll need to look out for:

Credit limit

Take note of your credit limit as offered by your bank and any penalty fee you may incur if you go over. Typically, most banks will have a fee. The best way to keep track of your spending is to sign up with an online statement service where amounts are reflected as soon as the merchant charges your card. Note that some merchants take 3-4 days before sending their credit card slips to the bank,  so some payments may not show up on your statement the day you make a purchase.

Interest rates

You may be attracted to your credit card because of its low interest rates, but did you know that missing even one payment can bump your interest rate to highest possible tier (usually 17-18%)? To ensure that your interest rates remain at the lowest amount make it a point to pay at least the minimum amount on time every month.

Most banks will let you change the bill date if you need your statement to arrive closer to the day your monthly salary is paid.

Cashback

Cashback credit cards are seen as the ultimate money savers. You should be aware that many cashback credit cards come with either a monthly or annual cap. Cashback rates also vary for different kinds of shopping categories. Having a good grasp of how your cashback credit card works is important to reap the rewards. Of course, avoid carrying a balance on a cashback card for maximum benefit.

If you spend a lot of money on your credit card every month you should know that some cashback credit cards offer unlimited rebates. The percentage unlimited cashback might seem small at 1% or less but if you're charging business expenses to your card you can earn a small fortune in rebates.

Reward Points

Reward Points may not be as valuable to you as cashback and most cards offer an either-or scenario – never giving you both. Nonetheless, some Reward Points programmes remain very popular with attractive gifts: if you're a frequent flyer you need to know that a few credit cards offer very good deals on earning airmiles.

If you’ve chosen a Reward Points card because of other useful benefits pay attention to how points can be accumulated, when they expire and how to redeem them.

Fees and charges

Many credit cards charge an annual fee and all of them must impose a government tax on you. There are ways to get these fees waived, either by using your card a minimum amount of times in a year or by redeeming your reward points. We keep an updated list of credit cards that have no annual fee, or that waive fees according to certain conditions.

Product Disclosure Sheet for your credit card

All banks are required by law to provide you with a Product Disclosure Sheet detailing fees and charges for your credit card. Bank Negara's intent is that you should be able to read the Product Disclosure Sheet for your credit card and understand all of the key points covered by the Terms and Conditions you are being asked to sign.

Sadly, a lot of banks hide the credit card fees and charges on poorly designed and out-of-date websites leaving you, the customer, with a tough job to find the things you must know before you can choose the right credit card. That's why we started RinggitPlus, to help you find the information you need about banking products quickly and easily.

If you can't find the answer to your question here on our website just send us an email, we'd love to hear from you and help you.

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