Best Credit Cards in Malaysia 2020
Contrary to popular belief, credit cards are not only for the rich.
They are designed to cater to various income levels, from the entry-level (sometimes referred to as "Gold"), mid-range ("Platinum"), and premium (different cards have different names, from Infinite, Premier, Signature, and more).
What is a credit card?
It is a payment instrument that you can use to purchase something instead of using cash. In theory, when you pay for something using a card, that amount is owed from the bank and need to be paid back.
How does a credit card work?
Think of it like a fast loan that you can pay back when your salary kicks in. To understand more on how it works, let’s take a look at the basic features such as follows:
A credit card has a fee that is charged annually to the cardmembers for the benefits that come with it.
Some of them don’t have an annual fee, whereas there are also cards with an annual fee waiver condition.
To get your credit card annual fee waived is simply by making one transaction per month for 12 consecutive months, or meet the card's minimum spending required in a year.
Interest rate on purchases
This may not be theoretically correct, but banks charge interest on the outstanding amount as a penalty for borrowing their money and not repaying them on time.
Credit card interest rate, also known as Finance Charge, is usually charged on the outstanding balance amount when it is past due.
For example, if you have used up RM300 on your card and failed to settle it within 20-day interest-free period, a Finance Charge of between 15%-18% p.a. will be levied on that amount.
In Malaysia, there are 3 tiers of annual interest rates chargeable on the outstanding balance based on the cardholders’ repayment habit:
|15% p.a. (1.25% p.m.)||Tier 1: for cardholders with prompt payments for 12 consecutive months|
|17% p.a. (1.42% p.m.)||Tier 2: for cardholders with prompt payments for 10 months or more in the last 12-month cycle|
|18% p.a. (1.50% p.m.)||Tier 3: for cardholders with payments of less than 10 months in a 12-month cycle|
If you consistently pay your card bills in full and on time, then you don't have to worry about interest rates at all.
This is a grace period whereby you can enjoy zero interest on your outstanding balance. This period starts from the date of issuance of your credit card statement until the statement due date.
This is the maximum amount that a lender can extend to you for a particular line of credit. If you earn a monthly income of RM3,000 or less, the bank will usually set a credit limit to 2 times your salary.
For those earning more than RM36,000 per year, there is no limit to the credit that will be assigned to you. You can also own multiple cards from multiple banks with varying credit limits.
Cash advance is a facility that allows you to withdraw money from your credit card through ATM much like a debit card.
Not to be confused with a cash loan facility whereby you can borrow a certain amount from your card and repay it in instalments, which is similar to an EPP.
A cash advance is subject to a cash withdrawal fee and interest rate of 18% p.a., which is calculated daily until you pay up the withdrawn amount in full.
Billing or statement cycle
Each credit card transaction you make will be posted in your credit card statement. This statement, which itemises all your transaction histories for the past month, will arrive at your mailbox or inbox in the current month.
It is important to take note of the statement due date so that you will not be charged with unnecessary fees and charges on the outstanding balance.
Minimum monthly payment
In your statement cycle, you are allowed to make a partial repayment of your card bill to avoid being charged with a late finance fee on the outstanding balance.
However, the remaining amount of your outstanding balance will still incur finance charge. The minimum monthly payment is usually at 5% of the total outstanding balance, which must be settled before the statement due date.
How many types of credit cards in Malaysia?
There are 4 biggest card networks in Malaysia: Visa, MasterCard, American Express and UnionPay. They partnered with Malaysian banks to issue credit cards to consumers.
The banks then further categorised these cards to meet various consumers’ needs and spending habits to having features such as cashback, reward points and air miles.
|Cashback||You get back a portion of money you have spent into your account|
|Rewards||You earn loyalty points for every Ringgit spent, redeemable for products and services|
|Air Miles||You earn loyalty points for every Ringgit spent, redeemable at your frequent flyer programs|
Normally, a credit card will have one of the features above. Depending on the income band, it can have a combination of features such as cashback and rewards, or air miles and cashback.
Best Credit Card Balance Transfer Plans
What is a balance transfer? It is a facility that allows you to transfer outstanding balances from other credit cards (usually from up to 3 different card issuers) to a new credit card up to a certain credit limit, at flexible tenures and low interest rates.
[updated: 1 April 2020]
What is the main requirement for credit card application?
The major requirement is your minimum income. According to the 2011 BNM guidelines, the minimum income for a first-time applicant is RM24,000 annually.
Banks will require a proof of income to qualify you as a credit cardholder. Other than that, you must also have a valid identity card, employer letter of confirmation and other documents to support your application.
Not all banks have the same income requirement for the same card type. For example, a Gold card by Bank A is offered to those with a monthly salary of RM3,000 and above, whereas Bank B opens to anyone earning a minimum of RM2,000 per month.
How many credit cards can I apply?
There is no limit to the number of credit cards you can apply from any banks, however, your chances of getting approved will depend on your income and other factors mentioned above.
BNM has stated that for those earning RM36,000 and less, you can own credit cards from maximum two different card issuers, with a credit limit capped at 2x your monthly salary (but whether you get this amount depends on the banks you choose).
For anyone with a yearly income of RM36,000 and above, you can own as many credit cards you want from multiple issuers.
What happens if I fail to repay my credit card on time?
If you miss your payment, late payment fee will be charged on the outstanding balance.
That's not all, your outstanding balance will attract a finance charge of between 15%-18% p.a. which is compounded daily until you paid off the overdue amount.
A late payment habit can have a negative effect on your CCRIS (Central Credit Reference Information System) record.
CCRIS is a central system that stores information of your credit histories which is referenced by all banks when assessing your credit risk.
That's not all, you will also have a lower credit score that consequently reduces your chances of getting approved on your personal, car or home loan applications in the future.
Which credit card is the best for me?
In RinggitPlus, we have several categories that can cater to the unique needs of every Malaysian, such as:
- Sign Up Offers – For the lovers of free gifts. Apply for a selected card, get approved by the bank, activate it and then claim your gift!
- No Annual Fee – First year free? Free for a lifetime? Free annual fee? You got it
- Cashback – Get cash back into your account on every spend
- Rewards – Collect reward points to redeem free gifts, vouchers and air miles
- Petrol – Earn reward points, cashback or air miles with every fuel spend. Get discounts on car washes, polishes, parts and accessories
- Travel – Save on fuel spend, air ticket or travel insurance coverage
- Islamic – For ethical spenders
- Air Miles – For frequent flyers and travellers
- Free Airport Lounge Access – For business frequent flyers
- Online Shopping – For shopaholics who have a con-fashion (confession)
- Movie Promotions – For movie buff
- Business – For entrepreneurs and corporate entities
Which banks can I apply for a credit card online?
There are 19 banks in Malaysia offering credit cards for various consumers with unique appetites that you can apply online for:
With FREE GIFTS:
- AEON Credit Service
- Public Bank
- Standard Chartered
Fast & Easy Online Application:
- Affin Bank
- Affin Islamic Bank
- Alliance Bank
- Bank Islam
- Bank Rakyat
- Hong Leong Bank
Best Credit Cards Malaysia 2020
Citi PremierMiles Mastercard
Standard Chartered JustOne Platinum MasterCard
HSBC Amanah MPower Platinum Credit Card-I
RHB Cash Back Visa Credit Card
AEON Platinum Visa