American Express® Gold Credit Card by Maybank - Things you need to know

I've recently applied for the Maybank American Express Gold Credit Card and here's what you should know if you want to or plan to apply one yourself.

The Card
If you apply now, you will get a temporary card. It was said that the actual card will be available soon and once the actual card is available, Maybank will send it to you.

5X Points for Petrol
You get 5X points when filling up your petrol using your Amex card but make sure that the credit card machine that is embedded into the petrol machine accept Amex card.
For example, I fill up my car at BHP and I can't use my card to pay at the embedded machine. BHP only accept Amex card if you pay at the counter. This is really troublesome and I resorted back to my existing visa card to pay instead.

15% Cash Back Promotion
The 15% cash back promotion is valid from 15 Nov 2010 to 28 Feb 2011. You will need to register before you are eligible for this cash back (see below on how to register). 15% cash back is only applicable if you shop at selected shopping malls (see below on the list of selected shopping mall). The cash back is capped at RM 150 per customer per tracking month. You will only received the cash back four to six weeks after the tracking month ended (so don't worry if it doesn't show in your current bill). More Terms and Conditions can be found here.

To register for the cash back, type
      “Cashbackyour 15-digit American Express Card number” and send to 62628.

Selected Shopping Mall
1) Bangsar Shopping Centre
 2) Bangsar Village & Bangsar Village II
 3) IKANO Power Centre
 4) Mid Valley Mega Mall
 5) 1 Utama Shopping Centre
 6) Pavilion Kuala Lumpur
 7) Starhill Gallery
 8) Sunway Pyramid
 9) Suria KLCC
 10) the Curve
 11) The Gardens Mall
 12) Tropicana City Mall
 13) Aeon Tebrau City, Johor
 14) Plaza Gurney, Penang

Tracking Month     Payout Month
15 - 30 Nov 2010     January 2010
01 - 31 Dec 2010     February 2010
01 - 31 Jan 2010      March 2010
01 - 29 Feb 2010     April 2010

I've spent using this card and I'll update again when I actually received the cash back. Any existing user wants to share their experience are welcome to post comment.

New Scam of Credit Card Balance Transfer

There seems to be a new scam going on for quite some time and I think some of us may already heard of it before. However, I wish to share it here so that more people will be aware of it.

This is how the scam works. Normally, they will call you and introduced themselves as an outsource company that do balance transfer on behalf of all banks in Malaysia. Their way of doing balance transfer is different than the normal balance transfer. The normal balance transfer requires you to transfer your balance to another credit card issued by another bank. The balance transfer offered by this company do balance transfer on the same credit card itself. This means that you are able to do balance transfer using your own card and repay the balance with interest back to the bank without the hassle of transferring it to another bank.

This plan is said to help you pay off your credit card debts at lower rate. Below are the rates that this plan offers:-

CIMB - 14% p.a. (at least 24 months)
EON - 13% p.a. (at least 36 months)
HSBC, CITI, HLBB AND MORE - approx 14.5% p.a. (at least 24-38 months)

This is how the actual plan really works:-

1. They apply as merchant that can apply for 0% installment schemes from all banks so that they are registered as merchant of all banks.
2. Then, they swipe your card of the amount of your balance transfer plus the interest that they charged.
3. Then, they will apply the 0% installment for the transaction so that the bank will charge you monthly installment.
4. They gain the interest that they charged you.

Even though it seems like you do not lose anything but this doesn't seems legal and you should report to Bank Negara Malaysia if you are approached with such plan. Just make sure you act and think carefully and in your search for lower interest rate for your credit card debt.

Top 5 lies or excuses you tell yourself to get into credit card debt. Which of these you often used?

Basically, there are a few lies or excuses that you tell yourself before you spend with your credit card and all these are what leads you to credit card debt. How many of these seems familiar to you?

1) It's an emergency
Often we use our credit card to pay something that we can't really afford at that time by telling ourselves that it is an emergency. Of course there are real emergencies like paying for a medical expense. But we tend to thinks that stuff such as paying for a car repair which is not your primary car is an emergency. If the car is not repaired and you still have another car for transport, then the repair is not really an emergency. Basically, anything that is not about life or death isn't really an emergency right?

2) I deserve it
Another common lies we tend to use. Usually after a hard work or after a long and hard period of saving, we tend to thinks that we deserve a reward. Purchasing something that you fancy or just an expensive dinner at the fancy restaurant to reward yourself is not really a good idea as rewarding yourself should not mean getting yourself deeper in debt. Is this really a reward?

3) It's a bargain
When there is a sale going on, we tend to buy more than we need simply because it is a bargain. However, these kind of great deals happen quite regularly and if each time you spent more than you can afford, then it's not really a great deal since you'll be paying extra on your credit card interest. It doesn't mean that we should not buy during a sales, just remember to buy what you can afford.

4) The reward from credit card totally makes it worth
We all know some credit card gave us reward points or even cash back when we spend with it but these isn't really worth it if you're not paying your credit card in full every month. If they give you cash back of 2%, then you actually save 2% if you pay the bill in full. If you're not paying the bill in full, at the end you'll need to pay the higher interest. So, avoid spending with the credit card if you are not paying in full every month or else the reward isn't really worth it.

5) I can afford it
You might think that you can afford to buy something but the truth is, if you can't afford to pay in cash, you can't afford it. Paying using credit card when you don't have the cash to pay it now means you don't really afford to buy the item and you might just get yourself into deeper debt.

So, that's the top 5 lies or excuses we often use. How many of it that you used regularly?

Cancelling your Credit Card might hurt your Credit Score

Cancelling your credit card seems to be a good choice if you want to lower your use of credit card and thus lower your debt accumulation. Fewer credit cards also means you can manage your financial life easier. However, with fewer credit card, it is not necessary better than having more especially when it comes to your credit score.

Before I begin with how cancelling your credit card may affect your credit score, I will first begin with why we need to have good credit score. Credit score is a number representing the creditworthiness of a person which means the likelihood of the person in paying back a loan. When you want to take a loan either for a house, a car or anything else, bank will evaluate you based on your credit score. Thus, people with good credit score will have a better chance to get their application approved rather than people with bad credit score.

Utilization Ratio
This is one of the factor that affects your credit score. This is the percentage between the total amount of your debt and available credit. This means that when you cancel your credit card, your available credit will be lower but your debt will stay the same thus increasing your ratio.

For example, you have two credit cards, both with RM 5,000 credit limits. You have a RM 2,000 balance on one of the cards, or about 20% of your total available credit. If you cancel the second card, you will then be using 40% of your available credit. It will increase your utilization ratio and damage your credit score.

However, this won't hurt your credit score forever. As soon as you reduce your credit card balances (or increase your credit limits), your ratio will decrease and your credit score improve.

What to do when you want to cancel your credit card?

Since our Prime Minister announced the RM 50 service tax for credit card in the new Budget 2010, a lot of credit card user has been cancelling their credit card. I have shared some Sample Credit Card Cancellation Letter in my other post since some of the bank may ask you to write in letter to cancel your credit card. However, before you want to cancel your credit card, there are something that you may want or required to do first.

Below are some of the things you are required or might want to do before you submit your cancellation form or letter.

Redeem your credit card reward points/cash rebates
Since you've earned all those reward points or cash rebates, you don't want to waste it all when you cancel your card. So make sure you use all your points/cash to redeem something before you cancel your card.

Inform your merchant about the cancellation
I'm sure we do use our credit card for auto debit or standing instructions where the merchant or company will charge the amount to your credit card on a monthly basis such as your insurance premium, your telephone bill or even your Astro bill. If you do have such auto debit, you must cancel it by writing or by calling them.

Clear outstanding balance/full settlement for flexi installment plan
This is definitely a required thing to do if you want to cancel your credit card. Any outstanding balance or installment plan must be settle in full before you can cancel the card.

After all of the above has been done, then you can either write-in / walk-in / call-in each credit card center to cancel your card. My suggestion is to try call-in first as it is the most convenient way. Write-in or walk-in only if you're required to. The customer service phone number of the bank will be at the back of your credit card.

Lastly, you will need to follow-up on the cancellation. This is also important especially when you did not receive any confirmation from the bank regarding your cancellation. Call the bank to ask about your cancellation status to make sure the process has been done.

After all of the above has been done, you can breathe a sigh of relief as you will have saved yourself RM 50.

FAQs on Credit Card Service Tax

This FAQ was provided by UOB and I share it to help clear some of the common questions that most of us should/would want to know.

What is this Credit Card Annual Service Tax?
In the 2010 Budget announcement , the Government proposed to impose an annual
Service Tax of RM50 for all Principal Credit Cards & Charge Cards and RM25 for
Supplementary Cards effective 1 January 2010. The objective of this proposal is to
promote prudent spending to all Credit Cards and Charge Cards users.

Will I be charged for this Service Tax?
The Service Tax is applicable to all Malaysian Credit Cards after 1 January 2010.

Can UOB waive this Service Tax?
Since this is a Government Service Tax, banks are not allowed to waive it. However,
cardmembers are encouraged to use their UNIRinggit Rewards Points or Smart$
Cash Rebates to pay for the Service Tax.

I have 2 Cards. Will I be charged twice for this fee? Per card or per customer?
The 2010 Budget proposed imposition of an annual Service Tax of RM50 per
Principal Card and RM25 for every Supplementary Card.

I am currently being charged annual fee. Will I also be charged for this fee?
The Service Tax is a fee imposed by the Government while the Annual Fee is
charged by the bank.

I have a cancelled card with outstanding balance. Will I still be charged for the Service Tax?
No, UOB will not charge you with the Service Tax when your cancelled card with
outstanding balance crosses into the next card anniversary date i.e. when the Service
Tax is due.

How will the Service Tax be imposed? Via card statement or pay to LHDN?
The Service Tax will be debited into your Card Statement and UOB will then forward
the Service Tax to the government.

Is this a confirmed Service Tax or only a proposal by the government?
The Service Tax was proposed in the Budget 2010 and is scheduled to be gazetted
in Parliament before 1 January 2010.

Although the above mentioned is for UOB Credit Card holder but most of it applies to all other banks as well. Using your rebates to pay for the service tax is only applicable to UOB Credit Card and other Credit Card will have to refer to corresponding banks.

To view the original document of the FAQs, please click here.

Credit Card vs Commercial Card vs Charge Card vs Debit Card

There are basically four types of cards in the market namely Credit Card, Commercial Card, Charge Card and Debit Card.

Since there are so many types of cards available, how do you know which type is better for you? I believe some of us don't even know what are the differences between these cards. Thus, here I hope to provides the differences and some benefits between these types of cards to help you find the right card.

Credit Card
Credit Card is the type of card that allows you to make purchases using the credit available which you will be billed later. This means that you can make any purchases without paying in real cash until your bill arrives. You have the options of either paying the total billed in full or any amount as long as the amount is not less than a minimum amount. The minimum amount is usually a percentage of the total balance of your card. However, since they allow you to carry a balance in your card, they charge you interest on the balance.

Commercial Card
Commercial Card is the same as credit card but is often issued for business use which includes corporate card, purchase card, business card, travel and entertainment card. Commercial card often offers business oriented rewards and is a mean of separating business expenses from personal expenses.

Charge Card
Charge Card is very similar to credit card where you can make purchases using the card which will be billed later. However, when the bill arrives, you will have to pay the total amount in full which means you are not allowed to carry a balance. This means that you will not be charged any interest since you do not carry any balance in your card. Using a charge card will help you to control on our spending.

Debit Card
Debit Card is the type of card that allows you to make a purchase by deducting the total amount of the purchase directly from your bank account. This means that you can only use this card to make a purchase if you have available balance in your bank account. No interest will be charged as you are using your own money.

Before you decide on which card to choose, bear in mind that according to the new Malaysia Budget 2010, all credit card, commercial card and charge card is eligible for the RM 50 Service Tax. However, Debit Card is not included in the list and thus by using Debit Card you do not need to pay the RM 50 Service tax.