Friday 3rd of February 2023

Credit Card Recommender – How do I find the Best Credit Card?

Credit card recommendations usually reach you in the form of word-of-mouth from family and friends. Your colleagues at the workplace can also be a heavy influence in your decision to choose one among the recommended credit cards. But the wise thing to do would be to evaluate your ways of spending.

The recommended credit card has to reflect your financial aspirations and the benefits that come along with it. To help you choose, I have compiled a few comprehensive pointers you can look up to, before taking credit card recommendations.

Salary, Charges, and Annual Fees

Banks have a minimum salary requirement to process your application for a credit card. This may differ for various cards. For instance, a high-privilege credit card in Malaysia may require your salary to be RM5,000. On the other hand, the salary requirement for a basic card would only be RM2,000.

Not all credits cards come for free. Some of them charge an annual fee, which at times is waived when certain retail spending conditions are met. But the cards that charge an annual fee are usually premium ones like rewards cards with high credit limits, balance transfer offers, lounge access, and so on.

A few (hidden) charges that get overlooked by customers include cash advance fee, balance transfer fee, foreign exchange fee, and so on. Analyze these charges with respect to your financial requirements before submitting your credit card application. Let’s say you travel abroad frequently. Now, your priority must be to apply for a credit card with low foreign exchange and foreign transaction fees.

For instance, Hong Leong Bank’s GSC Gold & Platinum Cards charge an annual fee of RM150 and RM75 respectively. But these credit cards offer unparalleled benefits that no-fee cards do not usually offer! So, my recommendation would be to choose a card that fits well with your salary plans and spending patterns.

Annual Percentage Rate (APR)

Annual percentage rate refers to the rate at which your credit card balance accumulates interest over time. A section of customers uses cards for almost everything, from retail to daily purchases. If that’s the case with you, choose a card with a low annual percentage rate, upsized credit limit, and rewards program.

If you are someone who is only planning on using the credit card for short-term financial flexibility, then APR wouldn’t really matter. Because, it is most likely that you would pay off your balance in full every month, without delaying your credit card debt. In this case, you could rather opt for a basic credit card with the annual fee waived and grace period extended to avoid high interest rates.

All that said, banks and credit card providers in Malaysia also vary the annual percentage rate and effective interest rate (EIR) based on customers’ credit score. Hence, you must try to build credit beforehand for better chances of getting a good deal on APR.

Benefits and Welcome Bonuses

Customers have their own set of goals with a credit card. Travel, shopping, cash back, and dining among others, are the prominent vistas that customers like to ease out with a credit card.

Breaking down to a few benefits to help you understand how they work:

  • Travel: If travel is your priority, make sure you would be able to avail 3X travel miles or its equivalent.
  • Cash Back: The card should ideally encourage returns for several types of transactions. Ensure that cash back is not limited just to retail purchases. Daily usage through petrol spending, groceries, dining, shopping – all have to be covered among cash back avenues.
  • Reward Points: Know more about the participating merchants where you can avail the accumulated reward points. Look out for credit cards that provide up to 5X reward points. Also, see if they offer the option of converting your spend instantly to rewards.
  • Flexible Payments: This allows you to avail flexible payment options on products offered by partner vendors. Some cards also provide 0 interest repayments over a 12 month or lesser tenure.

There are select credit cards that offer up to 25,000 welcome and quarterly AirAsia bonus BIG Points. If they fit your agenda, you don’t really have to think twice to apply! Welcome bonus reflects the lucrative benefits that you can enjoy by using the card. You get the advantage of a kick-start as soon as you apply for the card.

Personalized Credit Card Recommendations

Hong Leong Bank’s website features a credit card recommender tool, which personalizes the whole credit card applying experience. Instead of going through the tedious process of seeking recommendations from your peers, you can bank on this online tool.

The first step is to enter your salary. Then, it prompts you to choose the features and benefits that you expect out of your card. Once you are done choosing, the tool displays the probable cards that might resolve your financial needs. I personally found the recommendations customized to what I look for in a credit card.

My advice would be to use such tools from multiple credit card providers if any. Consolidate the recommended cards to narrow down your search and finally opt for the ideal one tailored to your needs.

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