May 01
My credit cards

My credit cards

Currently I have 8 credit cards. And these exclude the HSBC and OCBC card I’ve just canceled.

When someone has so many credit cards on hand, it can only mean 2 things. Either he is creating a financial disaster or he is excellent at managing money. Lucky for me, I’m not having a financial disaster :)

Today, applying for a new credit card is as easy as filling in a form. With a credit card on hand, you can use it to apply for other cards easily – without any salary or income tax slip. And this creates a big problem for many people at managing their financial.

However, bankers and merchants love it. The banker smiles broadly when they earn such a delicious interest (1.5% monthly) on unpaid balance, not to mention the RM5 late payment charge as dessert. Even if you fully pay your outstanding credit card balance every month, they also earn some percentage of your spending. But these are what they should get for providing us credit service and carrying some risk of default payment. No complain about that. No one force you to use their credit card.

For the merchant, accepting credit card means higher sales. They get higher profit even after deducting their credit card charges. Can you see the smiling faces everywhere?

What happen to consumer like you and me?

Personally, I think handling a credit card is too tough for most people. It gives you freedom to spend on things you don’t need and spend more than what you should. Credit card gives you more choices. And this is a two-edge sword. Most people bleed themselves financially with this cute little card.

Well, the problem is not the credit card. The problem lies in the user, which are you and me. Do you want a credit card for your convenience? Or do you want it to mess up your financial life?

I have a few friends who swiped their credit card until it exploded (reaching the limit). Actually they were having a well paid job. But eventually they had problem paying off their credit card debt.

Here are some tips to use credit card wisely:

  • Make sure you have money (in cash or bank) for your purchase before you swipe your card.
  • Ignore the card limit amount given to you. Follow your own monthly spending limit instead.
  • Don’t buy something just because you can (with your credit card)
  • Don’t upgrade your purchase to higher priced item just because you can pay with your card.
  • Try not to use installment plan even it is interest free. You will easily think you have more money in your bank although a portion of it has to pay for future installments.
  • Finally, pay off all your outstanding balance every month! The interest is 1.5% per month, which is more than 18% compounded interest per year. Unless your credit card purchase can generate more than 18% per year, you’re digging a financial hole if you let your bank charge this high interest rate.

Some people are actually afraid of using credit card. They worry uncontrolled credit card spending will mess up their financial life. However, if you can control yourself, there are several advantages of using credit card such as:

  • Convenience – you don’t have to bring so much cash
  • Transaction statement – you can monitor your spending in a tidy statement
  • Extra point bonus – you can redeem some free gift from your points (but don’t spend for the sake of point)
  • Extra discount – some utility company such as mobile phone company gives additional monthly rebate on credit card auto billing
  • Internet purchase – most online company only accept credit card as payment method
  • Free gift upon application – some credit card company give free gift or cash rebate for new application

How I end up with so many cards

  1. I first applied for Hong Leong credit card for its free-for-life promotion. At first the credit limit was RM 5000. But now it is RM 28,000 after using it for around 5 years. However, Hong Leong bank’s online banking is very poor. I need to log in twice in 6 months (if I’m not wrong) to keep it active. If not, I have to call their call center to activate it again. How troublesome!
     
  2. Then I got a CIMB card for my company health product purchase. We can get 1% cash rebate for purchase from our head office and 0.5% cash rebate for other purchase. Credit limit was RM 5000. But since I swiped a lot for my company product purchase, the card limit gradually increases to RM 18,000. CIMB Bank online banking system is average. I use it to check my available credit balance.
     
  3. I later applied for Senheng’s RHB PlusOne card for extra 1 year warranty for Senheng electrical and electronic product purchase. There is also cash rebate to exchange for Senheng voucher. Why not? Credit limit was RM 5000. Now is RM 6000.
     
  4. Later, my wife helped me to apply for a Citibank card because she just applied one. Using the CIMB card for application, I get a high credit limit of RM20,000 straight away. However it was troublesome to send check for monthly payment.
     
  5. My wife was using OCBC credit card and got a recommend-a-friend promotion letter. So I applied it and got RM50 cash rebate and a clock as free gift. Credit limit was RM 5000. I swiped once for RM5000 and later canceled it to avoid annual fee.
     
  6. I was at a shopping mall when I saw HSBC booth. I applied it to take advantage of its 3-month interest free balance transfer. Credit limit was RM 18,500. At that time, our head office announced a 10% price increase for all health products. So I bought a many products as I can to keep stock. All my credit cards were “exploded”. When credit card statements came in, I transferred RM 18,500 to HSBC card and paid off the remaining balance. After 3 months when our company got some cash back, I paid off the HSBC card. My calculation was correct and no interest was charged on any card. Then I canceled the HSBC card to avoid annual fee. I found out on a few occasions that HSBC customer service is quite poor. They made a big mistake on my balance transfer amount. They even sent a statement for annual fee of my wife’s card even though it had been canceled for several months.
     
  7. When I was in Citysquare shopping mall in JB, I saw Eon Bank credit card booth. I applied the Citysquare Eon Bank card to get parking discount and to use their toilet for free! But I found out Eon Bank’s credit card is the worst card I’ve ever had. I can only swipe once in the same shop, in a day. Imagine that! If you swipe once in a shop and decide to buy something else, you cannot swipe it again. My credit limit is also not shown on my statement. And I have to swipe it for 24 times in a year to enjoy the free annual fee waiver.
     
  8. Again in another shopping mall, I saw Standard Chartered credit card booth. You know what happen next. The given limit is RM 20,000. However, I never used it before.
     
  9. Last few months, I applied for Citibank AirAsia credit card. My sister said new successful application can get a Phillips MP3 player. But the promotion had been changed to RM 100 petrol voucher. RM 100 voucher for new application? Count me in! The terms and condition? I had to swipe 3 times in 45 days. I only swiped 3 times, got my RM 100 rebate and now waiting to cancel it.
     
  10. When I had so many cards, I tried to apply for Maybank and Public Bank credit card at different time. But both banks rejected my application, which I was shocked. But a few months later, a girl from Maybank called to offer me a free-for-life Petronas credit card. I told her my previous application was rejected. But she said she can recommend me because of my Fixed Deposit with their bank. So I went on with it and got my Petronas card with RM 15,000 credit limit. I have been using Maybank2u online service for some time. It is the best online banking I know. Now I can transfer money from my Maybank account to the credit card using my computer. I also use this VISA card to transfer fund from my Paypal account.
     

Before this, I applied so many credit cards because I may need it to purchase company product when the price is increased again. However, the big price increase only happens once. So I end up with many unnecessary cards. Now I’m in the process of reducing my card.

With all my cards, I paid off the full amount every month. But on several rare occasions, I was charged late payment charge and interest when I overlooked the payment time. Basically, I’m not a big spender. Even with so many cards and such high credit limit, I dare not much because I don’t earn much.

In conclusion, credit card is a double-edge sword. If you cannot use it wisely, you shouldn’t use any. If you can control your spending, credit card provides many conveniences and extra bonuses for you.

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2 Responses to “How many credit card you have?”

  1. kengkiat Says:

    the photo is no good. Ur standard chartered credit card very blur

  2. James Pang Says:

    I purposely focus on Maybank credit card and make the background blur by adjusting the Depth of Field. More info at:

    http://en.wikipedia.org/wiki/Depth_of_field

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