Credit Cards â Bankinginfo

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a.Interest free period<strong>Credit</strong> card issuers offer an interestfree period, usually 20 days, from theposting or statement date up to thedue date, except for cash advance andbalance transfer. Therefore, shop forcredit cards that offer longer interestfree periods to settle your balances infull without incurring finance charges.b.Fees on cash advance/balance transferMost credit card issuers impose a cashadvance fee on top of finance chargeswhen you use your credit card for cashadvance or balance transfer transactions.The cash advance fee may vary between3% to 5% of the amount. Thus, alwaysconsider applying for credit cardswhich has lower cash advance/balancetransfer fees.TIPS ON HOW TO MINIMISE YOURCREDIT CARD CHARGESIt is possible for you to avoid some of thecredit card charges and still have theconvenience of using a credit card. Hereare some tips on how that is possible:• Shop around for the best deal. Some creditcard issuers do not charge any annual feesand joining fees, at least for the first year• Use your ATM card to make cashwithdrawals. Taking cash advances usingyour credit card should be done only as alast resort. Cash advance fees and chargescan be expensive• Avoid unnecessary credit card costs. Makeyour payment before the due date statedin your credit card statement. Be sure toupdate your contact address to ensurethat you receive the statement on time• Paying only the minimum monthlypayment will extend your repaymentperiod and the interest you have to pay.Settle your outstanding balance in fullto avoid paying interest8
• Limit the number of credit cards basedon your needs and payment capability• Be alert of the changes in policies andrates. For example, your credit card issuermay raise its fees and charges or varysome of its T&CHOW TO AVOID BEING TRAPPED ASA BORROWER<strong>Credit</strong> card marketing strategies havebecome more aggressive and innovativeto entice credit cardholders not to payBe aware of theconsequencesof paying only theminimumrepaymentamount each monththe outstanding amounts in full and to continue carrying forwardthe outstanding balances each month. These borrowers or ‘revolvers’may think that it is beneficial and convenient to just pay only theminimum payment each month, but it is just the opposite.You should be aware of the consequences of paying only theminimum repayment amount by the due date of each month. Notonly will you incur more interest charges but also lengthen the timetaken to repay your balance. Many people do not realise the impactof accumulating their monthly credit card balances and end up withhuge debts.Below is an illustration of the repayment period and the totalinterest charged if you pay only the minimum monthly paymenteach month, i.e. 5% of the outstanding balance. For example, ifyour outstanding balance is RM1,000 and you pay only the minimummonthly payment, it will take you about 5.8 years to settle yourtotal debt and would cost you RM382 in interest charges, based onan interest rate of 18% per annum.OUTSTANDING AMOUNTSRM500 RM1,000 RM5,000 RM10,000Years Interest Years Interest Years Interest Years Interest(RM) (RM) (RM) (RM)4.2 168 5.8 382 9.6 2,097 11.2 4,2409
Page 4 and 5: WHAT IS A CREDIT CARD ANDHOW IT WOR
Page 6 and 7: Read andunderstandthe terms andcond
Page 8 and 9: You need topay yourbills ontime ino
Page 12 and 13: Alwayssafeguardyour card andcheckyo
Page 14 and 15: FREQUENTLY ASKED QUESTIONSWhat are
Page 16 and 17: What measures should I takewhen mak
Page 18 and 19: GLOSSARYCredit Card IssuerOrganisat
Page 20: FOR MORE INFORMATIONLOG ON TOwww.ba

Credit Cards â Bankinginfo

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Credit Cards â Bankinginfo