Ten rules for a smart credit card user

A CREDIT credit card is like a knife or a baseball bat: it is not per definition good or bad, safe or dangerous. 

How you use it matters, a lot. Maxing out on credit cards to fund your start-up, as retail therapy or to make a down payment on your first home? Bad idea. 

Having an extra method of payment besides cash that insures your purchases while collecting some rewards on the side? No harm in that.

There are 10 rules for every smart credit card user: what you should do and not with your plastic.


1. Don’t be seduced by any type of rewards which you are effectively funding yourself, either through a high annual fee, rewards you receive for carrying a balance, charges for “unblocking” rewards or changing rewards categories or overseas spend with an unfavourable exchange rate.

2. You can obtain all the free rewards that a bank offers, as long as it does not alter your shopping behaviour in a meaningful way. Remember: loyalty is expensive and should be reserved for friends, not brands! Giving yourself every now and then a small reward by purchasing a guilty pleasure is much cheaper!

3. Read the fine print. Rewards come with a lot of criteria, caps, expiration dates, minimums and maximums. Make sure you actually get what you think you are getting.

4. Compare credit cards. With more than 150 different credit cards available, you don’t just happen to come across the perfect card for your needs and circumstances. Use online comparison sites like CompareHero.my to get exclusive welcome offers and the best rewards for your credit card.

Paying your bills

5. Do take advantage of the grace period offered by credit cards and effectively have a free extension of your bills.

6. Pay your credit card bills in full, every month. I know this is a hard one, but why make easy rules? Not only does it help to maintain a healthy credit score but also because credit card debt is crazy expensive. Don’t use your credit card as a financing vehicle and accumulate any long-term debt on it. This rule can only be broken in actual, physical life or death situations and no, the latest gadget, fashion or food does not qualify as such.

Balance Transfer

7. If you have any credit card debt, you should take advantage of 0% balance transfer offers in order to temporarily stop paying any interest. It will allow you some more breathing room to pay down your credit card debt.

8. You must ensure you pay off your debt before the 0% balance transfer period is over. Banks only offer this because they count on you not being able to do this. Prove them wrong!

9. Don’t get yourself in a situation where you periodically move ever larger sums of money from one 0% interest balance transfer credit card to the next. This is an unstable situation and you should focus on paying off debt, not finding the next bank to finance it. You will sooner rather than later find yourself running out of Malaysian banks!

10. Finally, don’t be blinded by the supposed “status” that a premium card brings. Gold, platinum, diamond… but you still have to pay. Remember the truly rich (can) pay in cash. Use cards as a means to an end, not an end in itself. 

Mark Reijman is co-founder and managing director of https://www.comparehero.my/ dedicated to increasing financial literacy and to help you save time and money by comparing all credit cards, personal loans and broadband plans in Malaysia.

For a comparison of the best credit card offer in Malaysia, click here.

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