4 Mistakes You Should Avoid as a Cashback Credit Card Holder

  With the widespread use of credit card in the cash payment industry, the credit card companies have come up with different types of credit cards that can cater to different groups of people with different needs and lifestyles. Due to the highly competitive market, they are also giving all sorts of rewards and benefits to attract more consumers using their credit card. Hence, choosing the right credit card has become quite a daunting task, especially for those who wish to apply credit card for their very first time.

If you fall into the category of consumers whose main concern is to squeeze every ounce of savings from your credit card transactions, you probably will leap with joy when you come across the existence of cash back credit card. Credit cards have always been regarded as an evil tool deployed by banks to create a population of consumers with accumulating debts and bankruptcy cases. Hence, even when there is such benefit of receiving rebates for credit spending, some credit card holders are still wary of the hidden agenda behind such reward. Nevertheless, cashback credit card can be a means of saving if you use it well enough.

If you decide to apply for a cashback credit card, there are 4 mistakes you should avoid.

#1 Thinking that you are entitled to cash rebates for every transaction

  Keep in mind that not every store you go or even purchase you make will give you the cash back as per se. More often than not, you will only have a specific categories of spending such as groceries, fuel, restaurants or entertainment outlets, in which you can only get rebates from the bank. Thus, make sure you know what, when and where you can the cash rebate before spending your credit aimlessly.

#2 Not reading the terms and conditions

  This is very common not just in credit card applications, but the scenario happens when the phrase ‘terms and conditions’ applied. Before you sign the deal to agree on getting the card, always have the habit to read through the term and conditions thoroughly. You might think the information stated is trivial and redundant, but you will be taken by surprise if you find out later on that the details of the interest rate charged, minimum spending requirements, annual fees, etc are all transcribed in black and white. Do not get blinded into signing up a card for its free gifts offered during the credit card promotions period.

#2 Not knowing the cash back percentage and whether there is a limit on the cash back amount

  As a smart credit card holder, you have to know how much cash back percentage you are offered. Even before you decide upon which bank’s credit card to go for, you should compare the percentage cash back offered by different banks. Then later on, you should check whether there is a limit on the amount of cash rebates you can receive monthly.

#4 Spending more to gain more cash back

  If you have the naive thought of spending more to get cash back in return, you should just completely shake off the idea of holding a credit card at once. Credit card users must be wise and independent in the financial management. You would not want to be trapped into a spiraling debt due to overspending the credit limit together with the high interest rate incurred. Take the following situation as an example. When you are spending more, no doubt you might gain more cash rebates. However, what if you can’t afford to pay off your monthly debt, you are going to be charged with an even higher interest rate. To make the matter worse, the cash rebates you have collected are definitely not sufficient to cover the additional charges.

  All in all, these are just some of the advice for all credit card holders. Ultimately, every credit card user has to be responsible with his or her financial management. There are still so many benefits of credit cards that can be exploited by the consumers.


Should Your Children at College or University Have a Credit Card?

Credit card, also known as plastic cash, is a great invention that diversifies the cash payment industry. In this day and age, you do not have to carry cold cash around to pay bills anymore because you only need to swipe the portable credit card to do all these. Hence, convenience is one of the factors driving the escalating number of credit card users in Malaysia. In today’s modern world, even students in colleges and universities make up a portion of population of credit card holders.

  Most students use supplementary credit cards with their parents being the primary card member of the credit card company. There are different circumstances that lead to parents opting to give a credit card to their children in tertiary education level. Some do that to provide the children with material luxury as a sign of unconditional love. Meanwhile, some are just concerned for the financial convenience of their children when they are away from home. Whether you, as a parent, should agree with your children holding a credit card, it all depends on the necessity for your children to own one.

In the following paragraphs, we are going to see the do’s and don’ts for the parents before deciding on this matter.

The Do’s

  If your children are staying away from home, especially those studying overseas, providing them with a credit card is completely acceptable. This is when international credit cards come handy in transactions involving different currencies. It is inevitable for parents to be wary of their child’s safety, bringing around stacks of cold cash in a foreign country to pay the education fees and bills. Hence, credit card is indeed a more secure and safe means of payment.

  Besides, parents hope their children to be financially independent when they are young before they even step out into the working world. They trust that giving their children a credit card will make the youths learn the hard way to manage their credit responsibly. However, the young ones should be strictly warned not to spend beyond the credit limit. Perhaps, they can instill good discipline in the young card holders by asking them to pay the extra credit spent as well as the interest incurred for overspending. It is definitely the Asian parenting style by using a more ‘forceful’ way to teach their children. Likewise, some still believe that a child will never be obedient if no cane is involved in educating their children.

The Don’ts

  If you are providing your children with a credit card for the sake of social status or even worse, just because your peers are doing that, then you are surely being an irresponsible parent. In the long run, it will bring more harm than good to your children. Consequently, they no longer value the importance of money, leading them to neglect the essential of saving especially in their adulthood later on. So, no matter how well-off you are, do not resort to giving an unlimited credit card to your children just to portray the financial wealth you have. This is not a wise parent should do!

  Also, do not give in to your children’s irrational demands. Some youths presume that possessing a credit reflects their social status among their friends. They think that credit card is a tool for them to gain social acceptance or popularity. Hence, for instance, when your beloved one comes to you and request for his own credit card, always remember to question him to know his ulterior motive. If the child is using for the wrong reason, never be afraid to say no just because you love them. Providing material wealth is not simply equated to unconditional love.

  Ultimately, it is still up to the parents’ decision whether to give a supplementary credit card to their children. After you, as a parent, have weighed the pros and cons and believe that your child needs one for good reasons, then you can now start looking for the best credit card that suits your need and preference.


A family’s happiness is not determined by the size of house

In this age and day, we have always talked about equality in various aspects such as gender, job opportunities, education, etc. Regardless of which equality you are referring to, the notion of attaining 100% equality in all aspects is far more surreal than what you presume. Take housing opportunities as an example, even in the most developed city, you can still observe citizens of all walks of lives staying in different size and type of houses. Some may desire to own a landed property, but due to financial constraint, they could only afford a unit of an apartment. So, in today’s modern world, when it comes to buying houses, it all boils down to the financial factor.

Is there any correlation between the size of a house and the blissfulness of family living in the house? To answer this question, we will have to look into two different scenarios in the following paragraphs.

Scenario 1: A middle-income family has the luxury to live in a double-storey house, but is indebted with huge amount of home loan

James and his wife, Tammy have two schooling kids. Being the sole breadwinner in the family, James has to support the family daily expenses, his children’s education fees, insurance premiums and many more. With the monthly income of RM 3000 and sales-dependent commission, he barely can cope with the rising cost of living in the city. When James decides to take up the home loan to buy a landed property worth RM 400,000, he has prepared to embrace himself with the debts he will be living for the next 30 years. No doubt, he and his family live in house with spacious rooms, small garden and car porch. However, when James can’t make ends meet during some months, he has to postpone loan payment and hence, his debts accumulate like a rolling snowball. Due to the financial stress, he starts to argue with his wife and their relationship gets tensed up. They no longer live as a happy family as the racked-up debts haunt them day by day.

Scenario 2 : A middle income family only has the comfort of a cozy unit in apartment, but is debt-free

Joanne is a single mother who raises three kids all by herself. She earns money from the two jobs she does daily. From the saving she had over the past decades, she managed to buy a unit of low-cost apartment with three bedrooms 5 years ago. She only had to apply for a small amount of loan for the house renovation, in which she manages to clear off the debt in a couple of years time. Therefore, she now lives without debt and can afford to set aside a small portion of monthly earning for her children’s tertiary education funds. Not only are Joanne’s children considerate to their mother, they also respect her for being the sole breadwinner of the family. Hence, they take care of the household chores to reduce the burden on their mother’s shoulders. Although they do not have the luxury to live in a big house with grand furnitures, they are contented with their small yet homey apartment.

Hence, the answer is straightforward. If you want to own any house, you must ensure that it is within your means. Do not let the size of a house determines the happiness in you because a house acts a shelter where you and your family can live together and share good memories. Of course, if you need financial help to own your first home, home loan can always be a good option. You can apply loan that is reasonable in which you are able to make the monthly repayment fees based on the monthly income you earn. Base lending rate is one of the factors that widely discussed in loan issues. To know more about how the base lending rate affects home loans, you can click on here.

As mentioned before, home loans are the avenues that could benefit you financially if you know how to manage your finances well. Hong Leong home loan is one of the popular choices among the prospective house buyers.


Tips for young adults to manage personal loans

In the early 20’s, many young adults enter the challenging working world with the intention of chasing the life of their dreams. While some seek for a luxurious lifestyle with car, house and entertainment, others might be more practical with the dream of settling down in a simple cozy house with their lifelong partner. Ultimately, regardless of the lifestyle choice made, the solution to fulfilling these dreams boils down to money.

When young adults first join the workforce in their respective fields, they will be leaping with joy upon receiving their first month salary. Consequently, many things can be done with their first ever paycheck, for instance, splurging on clothes, buying the latest technology gadget, fine dining with friends and family, etc. At the end of the day, how much money could they save each month if most of the money earned only manages to cover the cost of living.

In the worst case scenario, the salary gained is not even enough to sustain their basic necessities such as paying rents and bills. Therefore, many opt for the extra little help by applying for personal loans as it is indeed the fastest and easiest route to get hold of a lump sum of cash. The word highlighted here is definitely cash! Who is not excited to spend the extra money on the things they have always wanted. Nevertheless, borrowers must keep in mind that these extra cash are borrowed and has to be paid back during the loan tenure, plus they are charged with interest monthly. Being said so, it is always true that nothing comes free in life.

So, here are some tips to manage the personal loans to avoid being trapped in spiraling debts. Right from the start, you should only borrow based on what you can afford with your current income. Do not borrow based on your expected future income since you don’t know how things will turn out to be. Before securing a personal loan from any bank, there are several things to consider such as the interest rate, eligibility criteria, early repayment fees and late repayment fees.
Also, practice the habit of paying the monthly repayment fees on time. Should you fail to do that, there is a late payment fee charged. Hence, you have to pay more than the initial amount and as more fees accumulate, your debt is also increasing. One way to ensure that you have spare cash to make the monthly payment is by setting aside some money from the salary each month.

Next, it is essential to budget your spendings according to priorities. If you decide on using the loan in buying the latest handset just because the mobile phone you bought six months ago is no longer in trend, you are surely not managing your loan wisely. Always lay out the expenses used in a month clearly. And, by doing so, you can keep in check the flow of money as well as ensuring that you do not spend beyond your means.

Last but not least, it is of utmost importance to choose the right bank that offers you the personal loan that best suits your situation. More likely than not, comparing the interest rate by each bank has been the most sought-after approach to decide on the ultimate bank. To compare which bank has the lowest personal loan rate at your fingertips, use iMoney’s personal loan calculator and rate comparison tool. Besides, you can check out the Alliance bank and Al Rajhi bank for their respective rates.