Banker's Thoughts

Yes! Yes! Yes! Look like you have just graduated from University with a recognized degree after 3-4 years of studies. For head start, those newbies will continue the norm and start searching for jobs that are relevant to their degrees. Nowadays, I think landing a job is not that easy but I believe many companies are still hiring. For those still looking for job, be more optimistic and do not be too selective on your job. You should be lucky if you are offered a job rather than be part of the 26,000 unemployed in the country.

1 month... 2 months... 3 months...

Generally, a company will offer 3-6 months probation for its new staff. Now, you become a PERMANENT staff. You got your confirmation letter! What is NEXT?

You continue to work hard for your job day and night. Then one day, while you enjoying your lunch in your favourite kopitiam, someone come to your table and asking you to apply a credit card from him or her (Luckily, not someone asking for money... HAHA!).

Or while you enjoying your walk (most probably in major shopping centers), someone will approach you and trying to start off their MISSION to offer you a credit card. I bet many have experiencing this scenario. It will even worst if you bump into an aggressive salesperson. He might follow you from behind like a paparazzi as if you are the celebrity of the year. LOL!




Those salesperson will start to bombard you with everything you wanna hear..."instant free gift, free-for-life, no annual fees, cash rebates, collect points for gifts...etc". Eventually, you will give up and sign for at least a credit card. Izzit getting a credit card a sin? NO! I will share with you why you should at least get a credit card.

But firstly, before you decide to sign up for a credit card from any commercial banks, you should consider some factors. Yes! Fancy design does not mean the credit card is better.

• Payment - Will you wanna get a card if you have difficulty making payment every month? You need to drive all the way downtown, stuck in the jam, queue for a long period just to pay the bill every month. It will be more convenient if you do not mind to incur additional charge of RM2 for service charge by using your existing bank account to pay for your credit card via e-banking or ATM machine.

• Free-for-life - This word is a bit catchy. If you notice in every credit card application form, this word will normally end with an ASTERISK (*). It means it comes with terms and conditions. Normally, free-for-life card will require cardholder to swipe at least 2 times every month or spend more than RM3,000 on retail transaction in a year. Remember to ask more about it before you sign up. If not, annual fee is still charged on your card although you just display your card at home.

• Cash Rebate - This feature is the most popular and beneficial for cardholder. Who do not want a card that you only require you to pay RM97 for RM100 you spend every month? I bet those who know how to calculate also want to enjoy this benefit. As usual, everything comes with terms and conditions. Different cards offer different cash rebates. Some allow you to get rebate every month while others allow rebate on annual basis. Some allow instant cash rebates on certain merchants. What you need to consider? Will you get a card that offer cash rebates in Carrefour but you only shop in Tesco? Be SMART!

• Point Rewards - For me, this is an additional bonus. It will be difficult to utilise the card to collect points everywhere. Normally, the bank will cooperate with selected merchants to allow you to collect points. You won't be that CRAZY to change your lifestyle to visit every restaurant, hotel, boutique, spa or etc just to collect points. I bet you will have your own favourite hotspot to hangout.

Great! Now you know what you have to consider before applying for credit cards. But bear in mind, you just need to evaluate which credit card suit you more rather than trying to utilise the benefit of the card. You won't be able to get a card that totally allow you to gain points or cash rebates everywhere you spend.




STOP! You might hear from others' bad experiences regarding credit cards. You might have friends, relatives or colleagues have difficulty paying for credit card due to overspending or mismanagement. They are the banks' best friends and loyal customers. The more they owe, the more interest will be charged.

What you need to do? Do not apply for a credit card? Just bring your cash to everywhere you go? Buying a laptop with RM3000 cash in the wallet? Izzit safe to bring so much cash in the city nowadays?

I will teach you how to handle this issue. But nothing come easy. Discipline is the key to overturn the problem. Let us start...

There is always a problem where people fail to notice how much they spend with their credit card until they receive their monthly statement. Oppss...They spent RM2000 and they only have RM200 in the bank. How to settle the debt? As usual, they will pay the minimum payment of RM100 (5% of total spending) and hope they will settle the debt next month. Guess what??! Same thing happen next month and the debt hole become bigger and bigger. Will this thing happen if you monitor your spending?

The main point now is MONITOR your spending. There are many ways to monitor your spending. The best way is to keep the receipts after you swipe your card. DO NOT throw your receipts. Besides being useful to trace your spending, you can use it cross-check with your monthly statement to avoid additional charge or credit card frauds. I have been using this method to monitor all my credit cards. It is easy to talk than action. You need to start to ACT NOW. Once you started your monitoring, you will know how much you spend and whether you have the capacity to repay it at the end of the month.

By doing this, you will become the banks' most hated customers. They won't able to earn any additional interest from you. You won't end up struggling to repay your debt and getting your salary every month to repay the bank. So... do you wanna become banks' best friend or most hated customers?

Bla... Bla... Bla... I heard some opinions....

"Who need credit card if I have cash? I do not mind shopping with plenty cash in my purse."
"My mom does not let me to apply for one?"

Let me tell you why you need at least a credit card. I won't share with you the reasons even your children know about the benefit of having a credit card. Let get more deeply...I will tell you something you do not know....

• Future Borrowing - If you do not know, a credit card is considered a credit facility provided by the bank to consumer. Whenever you have a credit facility with the financial institutions, Bank Negara will have your record. Getting a credit card is much more easier than getting a car or housing loan. Assume you are a 35-year-old man applying a housing loan and you have clean record and free from any credit facility, what will the bank think of you? NO! You are wrong! They won't think you are a good customer. You are their HIGH RISK customer. YES! You heard it correctly...HIGH RISK. They might just reject your application for housing loan. But why? For bank, it is very unusual for a person at that age who does not possess a credit facility. Bank assumes credit card is a necessity for everyone except for the people who do not qualify for one. Because your record is too clean, the bank cannot determine whether you are a good paymaster or not. They will rather not accept your application than risking their profit on you.

Is this reason giving you a better understanding why you should at least apply for a credit card? I believe credit card is a good financial tool if you really utilise it effectively. STRICTLY DO NOT ABUSE IT! It will only bring you more harm than benefit once you misuse it. If you really think you can't manage it or the temptation of abusing it is high... do not bother to even apply for one. Why think so much? There is still chances that your future borrowing application will be accepted. Just PLAY SAFE...