Having a credit card can be a blessing and a burden, with the latter being a notorious downfall for many users as they find themselves spending beyond their means.
When you’ve learned how to use it correctly, there are many benefits to enjoy from using credit card types, with earning cashback and rewards recommended for first graduates.
What is a Cashback Credit Card?
As the name suggests, a cashback credit card lets you earn an amount of cashback whenever you make a purchase with it. The types of purchases are depending on the categories valid for every card, such as petrol and online shopping.
Take the Hong Leong Wise Gold card, for instance. You can earn up to 8% cashback if you use the card during the weekends. But you’ll have to spend at least RM500 per month on selected categories such as petrol, groceries and dining in order to claim the cashback.
Rewards Credit Card
This type of credit card offers points that you can use to claim gifts. For example, the RHB Rewards Motion Code Credit Card rewards you up to 10 points when you spend on selected categories. For every RM1 that’s spent in categories not specified, you can also earn 1 point too.
Okay… so, which credit card should I choose?
Well, there’s no definitive answer since it all depends on how and what you use your credit card for. Cashback and rewards credit cards have their own advantages and disadvantages.
Cashback - Pros & Cons
For cashback types, you can earn as little as 0.1% or even up to 15% when you spend a minimum amount set by your respective bank. However, take note of cards with limited cashback you can earn per month.
For example, the 15% cashback on selected transactions using the Standard Chartered JustOne Platinum Mastercard is capped at RM60 max if you spend RM2,500 and above. Some cards even offer unlimited cashback but at very small % returns or with high minimum spending.
Rewards - Pros & Cons
Meanwhile, using a rewards credit card such as the GSC Hong Leong Gold & Platinum Visa, lets you enjoy daily rewards like RM6 off movie tickets. You also get to earn 3 reward points on every RM1 spent on GSC. The accumulated points can be used to redeem the likes of GSC 2D or 3D movie tickets.
But many rewards credit card points have an expiry date as well, which may push you to spend more than you should.
Some cards also only have selected gifts that may not feel worthy of the money that you’ve spent to get the points. Better rewards usually require a lot of points that you may spend a long time collecting.
And the right pick for you would be...
Cashback credit cards are suitable if you’ll use it regularly for certain monthly transactions. It’s perfect for buying groceries and pumping petrol which then technically offers a rebate on your credit card bill.
Rewards credit cards are suitable if you tend to spend a lot on a monthly basis and don't mind collecting points slowly for redeeming gifts provided by the bank.
Want to learn more about other credit cards? Check out these comparison credit card websites for the best credit cards in Malaysia at RinggitPlus or CompareHero.my.