Credit cards can really benefit you in many ways, provided you use them wisely. It is a kind of payment card that can help you accomplish a lot of tasks and fulfill your countless number of lifestyle related needs ranging from making grocery stoppings to book travel tickets.
Now, what is a credit card?
Credit cards are payment cards issued by banks to help you borrow credits from banks to pay for various services. However, you need to return the borrowed amount to banks every month on scheduled dates determined by them. As long as you pay your monthly credit card bills on time, bank will not charge any interest on your spending. But, when you fail to make repayment on time, you will have to pay heavy interest on your due amount.
Credit cards are accepted globally by using which you can shop anytime and anywhere, and they come with a number of attractive benefits to ensure that you lead a comfortable life. Credit cards can also be used for cash withdrawal and balance transfer.
Common mistakes to avoid while applying for a credit card
But, when it comes to apply for a credit card, little bit of carefulness is required on your part. There are some common mistakes that we as credit card applicants often make. Listed below are common mistakes that you should try to avoid while applying for a credit card:
- Don’t get tempted by various offers:
- Taking a credit card to pay off existing debts:
- Don’t apply for too many credit cards:
- Not knowing your requirements:
- Not reading the fine print:
- Not knowing the fees and charges involved:
- Don’t forget to check your Credit Rating:
Yes, it is important you don’t grab a credit only because it is offered to you and comes with some attractive offerings. Even if you get repeated e-mails and phone calls from credit card providers saying that that you have been selected as one their most valued customers and you are entitled apply for the latest credit card offered by them, don’t respond unless you really need a credit card. If you think you can manage your life without a credit card, don’t go ahead.
Don’t take a credit card to pay off your existing debts. Many people do so. But it is something you should really avoid, if you don’t want to be neck-deep in debt. A step like this may encourage reckless spending and serve only to accrue further debts which you may not be able to return.
One of the major reasons for the rise in debt in Malaysia is the increasing use of credit cards by many people. A single person applies for several credit cards assuming that it will help him/her split cost and avoid sinking into debt on one credit card. But, this actually worsens the situation and push them into more trouble. By doing so, credit card holders accumulate even higher overall debt and lose track of their spending.
It’s always important you know your credit requirements before you pick up a credit card. Different credit cards are available in Malaysia to suit your personalized needs. If your needs are dining related, there is no need to opt for a travel credit card. In that case, a dining credit card is what you need. Also, you should be clear about how much credit you need and for which purpose you would be utilizing these credits.
Don’t ever make the mistake of applying for a credit card without reading the fine print. The fine print of a credit card contains important information pertaining to terms and conditions and fees and charges applicable on the card.
Know the fees and charges applicable on you credit card, before you finalize your deal with any credit card provider. Many credit cards in Malaysia come with annual fees. If a card chosen by you charges annual fees, please ensure that the cost of benefits received with your credit card exceeds the cost of your annual fee. Also, you need to be aware of various other related fees and charges applicable on your credit card. Some of these charges may include - balance transfer fee, supplementary card fee, card replacement fee, foreign transaction fee, cash advance fee, credit shield field protection fees, late payment fee to name a few.
If your credit rating is low or not satisfactory, bank may reject your credit card application which will again bring down your credit score. Once your credit card application gets rejected, it becomes very difficult to apply for the same in future. So, before you apply for a credit card in Malaysia, check your credit ratings or credit scores. You can collect your credit report from Bank of Negara Malaysia (BNM) with absolutely no cost.
By avoiding the mistakes discussed above, you would definitely be able to choose the right credit card for you and lead your life in style and comfort.
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