What is the Credit Card Splash and Dash?
No Folks, it's not the great train robbery. The credit card splash & dash is a sneaky trick to earn cashback on a RM10,000 purchase with only a RM2,500 limit credit card. Don't pinch yourself, you're not dreaming and while it may sound too good to be true, the credit card splash & dash is completely legal and 100% possible. So before we get down to the juicy details, here's a little background information.
Credit Cards have a Good and Bad Side
Just like Dr. Jekyll and Mr. Hyde, credit cards have a good side and a bad side. If you use them the rightway, they'll shower you with rewards, if you don't, they'll punish you with late surcharges and hidden fees.
For those who’ve had credit card problems, or tend towards undisciplined overspending, you will find this article less useful. However for the debt-free and disciplined, there’s profit to be had as long as you strictly follow a simple golden rule:
Always pay off your credit card bills on time!
For the more forgetful, the best way to accomplish this is by setting up a direct debit from your current or checking account to pay your credit card in full each month. By choosing direct debit, you will only be borrowing credit for a short period of time so the credit card will not charge you any interest.
We Malaysians have the impression that credit cards equal debt. But if we break a credit card down, they in fact have two functions:
- They let you pay for things
- They let you borrow for things
By increasing #1 and reducing #2, credit cards become a useful tool that can literally earn you RM100′s or even RM1,000s per year.
What is a Credit Card Direct Debit?
A credit card direct debit is a pre-authorized payment system where the balance on your card is automatically deducted from your bank account at the end of the month.
If you charged RM1000 to your card this month then the credit card company will automatically deduct RM1000 from your account.
Setting up a credit card direct debit means that you'll be paying more (and reaping the benefits) rather than borrowing more (and paying the late payment interest). Once you've set up a credit card direct debit system to help you with the timeliness of your payments, you're all ready to Splash and Dash.
Splash and Dash
Suppose you're interested in buying a RM10,000 LCD TV but you only have a RM2,500 limit on your credit card.
Step 1: Splash
Splash your credit card with extra funds by transferring RM7,500 from your current/savings account into your credit card.Be sure to do so at least a few days before you make your purchase to make sure then funds clear into your credit card.
Step 2: Dash
Dash down to your friendly electronics store and make your RM10,000 purchase.
Step 3: The Reward
Now that you've made your purchase, you can now enjoy your cashback and rewards points on the entire sum of RM10,000 (as opposed to absolutely nothing if you chose to pay by cash).
A Word of Caution...
- Credit card companies can be sticky with large purchases at times so be sure to inform them in advance that you'll be making a big transaction to avoid them flagging your card as stolen. The last thing you want is your card getting declined....that would definitely ruin the mood.
- Be aware of maximum credit balances. Some credit card companies have a maximum balance on their cards so you might want to find out what that is. To earn more rewards, request for a higher credit limit on your card.
pictures courtesy of Freedigitalphotos.net