The first banking product for most fresh grads; credit cards are a great way to kick-start a blank credit record and teach a newbie about responsible borrowing. But with hundreds of cards flooding the market - how is a first timer to choose?
Yes, there are definitely a lot of cards and what they offer you will be vastly different so before you ride off into the sunset with the plastic of your dreams - some factors need to be considered. Here are our tips to help you along.
Which Credit Cards Are Available to You?
There may be 300 cards in the market; but certainly not all of them are will be available to you as credit cards start with basic minimum income requirements. The higher your salary; the more attractive the card you are eligible to apply.
That's not to say then that newbies have limited options! There are many credit cards available with the barest of minimum requirements. To find which match yours, you thankfully, no longer have to head to every bank. Check out our credit card comparison page with all the cards in one place.
Once you've narrowed down the possibilities - it's time to cut it down further to help you make a decision.
Give Priority to Cards with No Annual Fee and Low Interest Rates
When you're a fresh grad in the working world; for the most part you are probably starting at a fresh grad salary. You will be learning to ropes where money management is concerned and most likely will have many more bills to pay than when you were studying.
Considering the challenges - the last thing you want is for your credit card to be an unnecessary burden. So when selecting; choose the cards with the lowest interest rate and no annual fees.
Low interest rate cards are easy enough but no annual fees may be a bit of a task to find. Many credit card companies claim to offer a waiver on annual fees but they then slip in a condition - only applicable if you swipe 12 times a year or only for the first 2 years and then subject to bank approval.
Best to avoid the cards with sneaky terms for now. When you're juggling getting used to work and life as an adult; waivers that attach themselves to spending could turn out to be a motivator to fall hopelessly in debt. You may be bummed to miss out on the awesome offers and benefits other cards tout but remember that there's always time in the future to switch once you are steadier on your financial feet.
Consider Your Lifestyle
You've probably already narrowed your choices down to a select few cards and here's where the fun starts. Now you get to decide which perks suit you best. Credit cards in Malaysia come with a range of benefits from cashback, rewards points and airmiles; some even with a combination of a few.
Think about the things you like to do; will be doing most and which benefit offered will be the most useful to you. If you're getting a little starry eyed over the choices; you can always try the card with a range of a few benefits that may be on a lower scale. Once you've had a taste of each you will be in a better position later on to switch to a card that suits your newfound likes.
Have Back-up Selections
Just because you've done the work and finally chosen the card you want most of all - it doesn't necessarily mean the bank is going to give it to you. You may have a spotless credit record (ie. no credit record) but depending on the bank's internal processes; there may be a host of combining factors that make you not the prime applicant at the moment.
For this reason, it helps to list a few back up card selections to apply for in case your star card is not approved.
This does not mean you go out and throw card applications left right and centre! This may backfire if all your cards are approved and you are stuck with more than you can legally hold (Bank Negara Guidelines limit the number of cards you hold when you're income is equal to or lower than RM3,000 per month) or if it entices you to swipe, swipe, swipe and be left with a mountain of debt.
Get Ready to Own Your First Credit Card!
Once the gruelling selection and application is over (We recommend applying online with no fuss, forms or bank visits via our XPress-apply page) , it's time to welcome your new plastic baby!
Preparing your financial life for the arrival of a new credit card means being clear on your responsibilities to the bank and the best practices when swiping. A credit card can be a friend or foe depending on how you treat it. So spend wisely, borrow responsibly and you'll find a world of benefits open up to you.