NEWS: Malaysia’s First Fraud Prevention Bureau, CTOS IDGuard, Saves RM21.1mil Even Before Its Official Launch
- By CompareHero.my
- August 19, 2020
CTOS Data Systems Sdn Bhd recently collaborated with GBG, an identity management, location intelligence and fraud prevention company to launch CTOS IDGuard as a platform to prevent application fraud within the banking industry in Malaysia. Here’s what you need to know about CTOS IDGuard and how it can be useful for both banks and customers.
A few weeks ago, we wrote about identity theft and how it can affect you as a consumer. If you missed it, identity theft happens when someone steals your identity and uses it for their own personal gain. This could include stuff like making transactions using your credit card and signing up for loans in your name.
While there are some ways for everyday consumers like us to safeguard ourselves from becoming victims of identity theft, have you ever thought… what are banks doing to avoid this?
Well, an established financial institution would have their own fraud protection team to review applications. But for the past few months, something else has been quietly making waves behind the screen: the CTOS IDGuard platform.
Read also: 10 Dos And Don’ts To Avoid Credit Card Identity Theft
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What is CTOS IDGuard and how does it work?
CTOS IDGuard by CTOS
Before we explain what CTOS IDGuard is all about, you need to know what CTOS is. If you haven’t heard of them, well, they’re Malaysia’s largest credit reporting agency. It’s most commonly known as a place where you can check your own credit score. (FYI, that’s also where companies – and maybe even potential in-laws – go to check on your score too.)
Read also: What Is A CTOS & CCRIS Report And What’s Their Difference?
In recent months, they’ve partnered with GBG (a global technology specialist in fraud and compliance management, identity verification and location data intelligence) to complete a large-scale pilot of the CTOS IDGuard collaborative platform.
CTOS IDGuard was made with the intention to combat application fraud in Malaysia. It’s the first fraud bureau in Southeast Asia, marking yet another major milestone in Malaysia’s move to strengthen our financial services sector, and to stay apace with the needs of digital financial services.
It’s particularly timely now as we move into a digital banking revolution. In KPMG’s Global Banking Fraud Survey 2019, they revealed that fraud and financial scams in the banking sector are on the increase worldwide. With over half of the banking survey respondents recovering less than 25% of losses, fraud prevention cannot be more important.
In this five-month pilot, CTOS worked with seven of the country’s leading banks to screen through applicants in the area of personal loans, cards, auto financing, mortgages, and SME loans.
Powered by GBG’s fraud detection engine, they were provided with real-time automated alerts on potentially suspicious loan applications. (Think inconsistent applications where the same applicant would apply for multiple banks using different personal details, such as their income level.)
“Whether it be as simple as alerting banks to known fraudsters or uncovering duplicate applications with differing income or contact details, credit application fraud is a persistent threat to Malaysia’s banking institutions’ reputations, confidence and finances, especially in these challenging times.” – Dennis Martin, Group CEO of CTOS
Using data that were given by banks and other public sources, the CTOS IDGuard pilot scheme screened through 450,000 applicants. From there, the pilot:
- identified 24,396 potentially suspicious applications, and
- confirmed 691 cases of these applications as fraud.
Just by doing that, they raked in a total of RM21.1 million in potential savings. (That’s basically the value of the loans that would’ve been dispersed to fraudulent applications.)
“The CTOS IDGuard collaboration with the banking sector has been shown to help in three ways: increasing the ability to detect fraud, increasing the speed to complete investigations into suspected fraud, and increasing the confidence with which to make a decision about suspicious applications,” Martin adds. “CTOS IDGuard will become increasingly effective with more members expected to come on board soon, giving participating banks the robust, comprehensive and data-rich resource they need to protect their most important assets.”
To add, banks which become members of the CTOS IDGuard fraud bureau will be part of an industry group that will share best practices and latest trends in fraud locally and regionally every quarter.
How does the CTOS IDGuard help everyday Malaysians? (And what can you do to protect yourself?)
While you may think that this only helps banks, you’ll be surprised as to how CTOS IDGuard can affect you as a consumer.
“It is crucial that the public and businesses get access to credit on as fair terms as possible as we move towards a post-MCO Malaysia,” Martin said. “The cost of fraud directly impacts the cost of credit; reducing fraud will benefit everyone, not just banks.”
From what we understand, fraudulent borrowings cost banks hundreds of millions. This may have a trickle down effect to consumers, as an increase in cost may reflect in the cost of borrowing in order for banks to make business sense and stay competitive – heightened interest rates, for example.
While we wait for the CTOS IDGuard to officially launch in the coming weeks, there are other ways for you as a consumer to safeguard yourself from identity theft.
During our research, we found out that CTOS has a separate offering called CTOS SecureID. If you sign up for it, you will be alerted for any changes in your credit profile (e.g. if someone uses your identity to apply for a loan). You’ll also know if your personal information is found on the dark web.
Apart from that, you can also practice these general tips to stay on top of your game:
1. DO review each line of transaction in your credit card bill.
When you get your bill, or even as and when you want to online, check your transactions that each one of them were done with your knowledge.
2. DON’T make a payment on open networks.
Public WiFi and unsecured websites (site URLs that start with http:// instead of https://) make it easy for other computers to intercept your information. By putting in sensitive information, like your credit card details, thieves would be able to easily steal these for their malicious plans.
3. DO look over your shoulders before you pay.
Whether using a pin or making a payment online, just do a quick look around you to ensure there are no prying eyes trying to remember your details.
4. DON’T give your credit card information to unverified people.
Yes, this means even your credit card number. A lot of people think that it’s important to hide the last three digits (CVV) of your credit card, but the truth is that every part of your card should be kept private to yourself. If you ever find someone calling you on behalf of an institution, asking you to verify your credit card number, be wary. You should be the one to initiate the call, and not the other way around.
5. DO call your bank immediately whenever something happens.
Whether you suspect funky business happening, or if you misplace your card, call your bank to alert them to check up on activities. You can also ask them to freeze your card until you find it back.
6. DON’T send an email with your credit card number.
As secure as emails can be, it’s so easy for people to hack into email accounts. Don’t increase the chances of someone catching your details – look for alternatives if the business you’re dealing with asks for your credit card number.
7. DO shred your documents.
Credit card bills that come in the mail should be destroyed in a way where thieves will not be able to make out your numbers. Thieves may dig through recycling and rubbish bins to search for information.
8. DON’T post photos of your credit card online.
There literally isn’t a single reason for you to do so. Posting a photo of your card online, even if you hide most of the numbers, is an open invitation for thieves. You’ll be surprised how quickly they can put the pieces together, as credit card numbers are created in a specific way. (E.g. all Visa card numbers start with ‘4’, the next five digits reveal the bank or issuer.)
9. DO disable autofills.
When shopping online, some sites may have an autofill feature so you don’t have to keep typing in your details. Avoid that – just key in your details when you want to buy, as such sensitive data stored can easily be stolen by hackers.
10. DON’T keep your phone logged in to your banking app.
Always log out once you’re done as your security can be compromised if your phone lands into the hands of a thief.
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#DigitalCareers: How To Switch Careers During A Pandemic
- By CompareHero.my
- August 17, 2020
If you’re thinking of a career switch or change in the middle of COVID-19 pandemic, there are several factors or reasons you need to consider before making your decision. This article explains 8 signs on why and when you need to consider changing your job and how you can do it.
Across the globe, the COVID-19 pandemic has impacted thousands of people in almost every industry. At times like this, you may have lost your job, been offered a pay cut, or been quietly suffering in an industry that isn’t adapting well to the change. You may be thinking of leaving your job for something completely different.
Or, in a less grim world, you may just be simply stuck in your current career for a little too long, and you may feel like it’s time for something new.
So what can you do in times like these? A career change seems like a tempting idea, but before you jump into it, ask yourself – is this what you really need? And if so, how do you go about a career change in the midst of a global pandemic?
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8 surefire signs you need a career change – and why you need it
Remember, we’re talking career change – not merely leaving your company just because you don’t like it there.
- You don’t feel challenged in this field anymore. Not that you want to brag, but you feel like you’ve reached the ceiling. And though there is more that can be attained, you’re not interested in pursuing any further.
- You want to focus on something else. Perhaps you have started doing something on the side, or you have recently had a major life change that requires you to shift your focus to something else.
- You are not learning anymore. What’s new out there for you? You feel like you’re stagnant, and are hungry to learn more.
- You are not willing to give your 100% to your work. You just don’t have the passion to go the distance anymore – it just doesn’t interest you any further.
- Your values no longer align with your career. You may have taken your current job because of the salary, but perhaps you now want to make an impact in the world.
- You have a hard time going to work everyday. You can’t help but drag your feet to work, and you hate going to clock in every morning.
- You would not take another offer from the same field. Even if it’s a 50% increment, you would not have the desire in you to take it up.
- You feel that there is something out there for you. You have a nagging feeling that you’re missing out on something else, and you’re curious to explore.
With all these feelings, it could be time for you to take a bold step to change your career. But you may ask – why change careers when you’re getting a stable paycheck?
There are two schools of thought. One says that your job is just a job, and if you’re able to bring in the money to help you survive and more, then you should just do your best and be grateful for it. The other says that your job satisfaction comes first, and there’s no point doing something that makes you miserable – even if it pays.
If you fall in the latter, then you must know that staying in a career that doesn’t drive you, will only lead to a degeneration of your mind and passion. In 24 hours, we perhaps spend about 8 hours sleeping, another 10 hours working, and perhaps another 6 hours just doing whatever we want.
In that regard, working takes up at least half of our lives, so ask yourself – do you really want to be stuck doing something you hate for half of your life? Apart from job satisfaction, a career change, when done correctly, can help you grow in many ways, too – professionally and as an individual.
How to change careers during COVID-19
If you’ve finally decided to change your career, here are some of the ways you can kickstart your plan, especially in this economy.
1. Figure out what you actually want to do
So you’re done with being in accounting or marketing or the service line. What do you want to do, then? Figure out what makes your heart race, what you feel passionate about. But be realistic too – switching from, say, culinary arts to medicine is not impossible, but tough. Consider if this switch is something you can take on in your current situation.
2. Look into the survivability of the career in 2021
The COVID-19 pandemic has hit the world in many ways, and businesses have had to adapt in many ways. Do your research on how the industry of your choice has reacted to the impact before jumping into it.
There are also other sunset industries that were already impacted before the pandemic hit – like print media – so if your heart is set on these industries, you may want to consider being in something that is going up rather than down.
3. Perform an audit on your skillset (and level up, too)
Pandemic or not, you will still need to see where you stand in terms of your skillset. Employers are less likely to hire you if you don’t have what it takes to be in your new industry, so before you go knocking on doors, it’s important to first take a cold, hard look at what you can and cannot offer.
In areas where you lack, try to level up with online courses or doing part-time jobs that will help you gain some real-life experiences. You can also see how some of your current skills could be transferable to your new career too.
Like it or not, it’s important to look into the digital aspect of your future job. It’s no surprise that digital careers are on the rise, so as things evolve, it’s important that you future-proof yourself by picking up important technological skills along the way.
4. Speak to a recruiter
Speaking to a recruiter is a great way to learn more about yourself and the role or industry you plan to venture into. They can tell you straight up to your face – what you lack, what you have, what your options are, and if there are any roles that you can try.
5. Create multiple paths
Instead of being set in one plan, consider various paths for your future. If you were to take this route, where would you be able to go from there? What can you do if it fails, or if it passes? Can you venture into entrepreneurship? Add an option if the pandemic doesn’t end, or if more pandemics pop up again.
Planning helps you think on a larger scale of things, and helps you prepare for uncertainties that may come in the future. If you’re changing careers, you want to make sure that you choose the right one that will give you the best probability for your upcoming years.
6. Prepare your CV/resume
Once you’ve set your goals, it’s time to work on your CV/resume to be sent out to recruiters and hiring managers. Be sure to highlight your transferable skills in a way that would add value to your new role. At the same time, highlight your past achievements too.
We found this incredibly helpful guide on how to do so (and more) from global recruiter Indeed – learn more here.
7. Be ready to take a pay cut
We’ll be honest – a career change will likely put you at a disadvantage, and employers will find it hard to justify paying you an increment on top of your current salary. In fact, you could either be offered the same pay, or in a more likely scenario, a pay cut.
You may have 10 years’ worth of experience and an incredibly talented pair of hands as a fitness trainer, but all that may seem little to a company that needs you to be meticulous with numbers. As such, be ready to adjust your spendings if a pay cut is offered.
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#InvestInsights: What Should You Invest in During a Recession? An Expert Weighs In.
- By CompareHero.my
- August 14, 2020
Are you considering investing when a recession hits during this pandemic, but not sure what to invest in? Here are some tips and advice given by an expert on investment strategies and what you should invest during this period.
Investing during a recession seems scary. The volatility of the market can result in two polarizing scenarios: the rare opportunity to score a huge gain or accumulating an enormous dent on your portfolio (and wallet) due to turbulent market movements.
But investing during a recession is not impossible. Based on findings from our previous article in this #InvestInsights series, we concluded that it may not be a bad idea to start investing during a recession after all, as long as one is aware of their limitations and circumstances.
The rationale behind it is simple – market fluctuations are normal during a recession, and bailing out on the markets will cause more harm than good because it’s always better to hold and regain value than to sell and incur recession-related losses.
But before you can build a profitable portfolio, there are some underlying factors to consider before diving head first.
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Factors to consider before investing
First and foremost, as a quick recap from our previous investing article, when it comes to investing, it’s crucial to get the basics right because what you don’t know will cost you.
Secondly, relying on hot tips and hunches, and educational articles (like ours!) is not enough. Investors need to conduct comprehensive due diligence on companies. There’s a lot of publicly available information out there to help you through this process. Suss out the company by reading up their latest news, transactions, financial statements, balance sheet etc. Find out as much as you can about them, especially the basics like market capitalization, revenue and profit trends, competitors, ownership and debt-to-equity ratio.
Related: #InvestInsights: Should You Start Investing During A Recession? An Expert Weighs In
But investing is a two-prong effort – besides understanding the company and what they have to offer, it’s equally important that investors assess their own level of investment capability as well. Figuring out what you’re capable of delivering as an investor, will ultimately help you decide the crucial factors to consider before investing.
To help us identify what types of investments to consider during a recession, CompareHero.my spoke to a certified financial planner and personal finance blogger to help us get two different perspectives. But before we get there, you need to first ask yourself six very important questions.
6 questions you need to ask yourself before you start investing
Mull over these six questions to help assess whether you are ready to make an investment:
1. Are you capable of investing right now?
Investing for a house? Or maybe a new car? Narrow down your goals before you begin investing.
With COVID-19 still rampant across the globe and the economy still in shambles due to the Movement Control Order (MCO), investors need to be frank about their own capability of investing.
For most people, having a secure income or building an emergency fund are their current top priorities. Investors must figure out if they are fit to invest before even beginning to invest.
“From my perspective, survival is the absolute priority right now. Let’s say you are in an industry where you feel the job isn’t very secure and you have loans to pay – I think someone in this instance shouldn’t just be thinking about survival but potential loss of income,” said Aaron Tang of Mr Stingy, a popular personal finance blog that covers a variety of topics, including money, time, career and relationships.
Though Tang isn’t a certified financial planner and doesn’t have formal financial advisory credentials, he’s gained an extensive following online from writing about personal finance on his blog, Mr. Stingy, in his spare time. (Image source: Mr. Stingy)
“What happens if a person’s company goes down and they’ve lost their income? I think someone in that situation is thinking about income replacement before investing, especially in today’s bad economy where people are getting laid off and shops are closing etc.,” he added.
To help cushion any unwanted circumstances during a recession, Tang said it’s crucial for everyone to prioritize building their emergency savings first, which is typically 6 to 12 months of a person’s income. “From how I see it, you need to build a very secure base first, and that comes from having a stable income. This is particularly true when investing in high risk investments,” he said.
2. What are you investing for?
Your risk appetite and duration of investment, a.k.a your time horizon, depends on which stage of life you’re in. (Image source: Harveston Financial Group)
Everything that we do or pursue in life usually begins with a clear objective in mind. Why do we go to school? To gain knowledge which would later help us find a job or career that aligns with our interest. Why do we find a spouse? So we can have a partner in life who we get to spend time with and build a family together. The principle applies to investing too.
Before investing, take a step back and remind yourself of the objective of your investment. Are you just eager to beat the market and make a quick buck by maximizing returns in the short term? Or is it for more personal gains like retiring, having enough to travel, buying a house or sending your kids to college?
Find out your real goal and stick to it. If it is having a certain amount of money by a certain date, then commit to that. Any decision you make while investing should be to serve that goal and nothing else.
3. What stage of life are you in?
People in different stages of life will have different needs and resources, and figuring out which life cycle you belong to will help you understand what types of investments suits you best. (Image source: Harveston Financial Group)
A 25-year-old fresh-out-of-college will have different financial goals and needs compared to a mid-age 35-year-old, or a retiree.
Similarly, a fresh graduate wouldn’t be able to take up the same amount of investment risk compared to an established manager who might be earning a six figure salary. Therefore it is crucial to figure out which stage of life you’re in before committing to a certain investment risk.
A certified financial planner, Phang is also licensed by the Securities Commission Malaysia as a Capital Markets Services Representative and by Bank Negara Malaysia as a Financial Adviser’s Representative. (Image source: Phang Kar Yew)
A person’s life stage determines their risk appetite, Phang Kar Yew, Executive Director and Co-Founder of Harveston Financial Group said, these two factors must go hand in hand in order for a person to pin down the most suitable type of investment for them.
“When you’re younger, you may afford to take the ‘fast and furious’ approach, which is to be more aggressive in the market. But I still believe that at that stage, the priority should be about wealth protection. You have to protect yourself in the event anything unfortunate happens,” Phang told CompareHero.my. “This is called investing according to the stages and lifestyle requirements.”
4. Do you understand your needs and resources?
Do you have enough to invest? Begin your journey with this crucial question first.
Take some time to figure out if you actually have enough resources to invest. Purchasing a stock may not be too complicated or time consuming, but the act of planning and figuring out what and how much resources is available at your disposal is what needs more of your attention.
- How much do you currently have in savings?
- How much do you need to invest?
- How will this investment add into your overall portfolio?
- Do you have an exit strategy if things don’t work out?
- Would you need to adjust your current investments plans?
Understanding your own capacity to invest helps you go into it prepared, knowing that you are aware of your resources and limitations. You should never commit to what you’re not willing to lose.
“Maybe you did some small investments previously but didn’t have a cohesive plan to go with it, and now you want to make another big investment – that needs to be reviewed,” Phang said.
5. What is your risk appetite?
An investor’s risk appetite is sometimes a reflection of who they are and their personality – it says a lot about them as a person and what they value.
If you’re more adventurous, are aggressive and have the means, you could be more of a risk taker in the market. A conservative investor would be more risk averse, avoiding volatility and emerging industries due to their inability to estimate the returns. And risk moderates are people who sit on the fence, they observe the market and take small steps on both ends.
An investor’s risk appetite depends on where they are in their stage of life and what goal they hope to achieve from their investment (point 3).
Those eager to make a quick buck, may not want to invest in volatile markets because they could end up losing fast, too. Those in it for the long-term may consider taking up higher risk investments because it gives you a longer duration to make up for any potential loss.
“You need to first understand the amount of risk you are willing to take because there’s a lot of different types of investments. Doing this requires you to understand what type of person you are,” Tang said.
“Are you very risk averse? This means you like really safe investments that will give you slightly less percentage returns. Or are you a person who is willing to take more risks, willing to bear more ups and downs in the market. There’s no right or wrong answer as different people will be able to take up different risks,” he added.
6. Is now the right time to invest and how long will you need to invest?
There are a few time-related questions that you have to answer before starting an investment.
First, you need to figure out your duration of investment or time horizon: short-term or the long-term. The fact is not everyone invests to retire – some just want to invest for quick returns in the short-term.
Investors who are waiting out on the long-term can take up more risk because they have a longer time to recover from any potential loss. Those who do not have the same luxury of time might want to stick to less risky investments like bonds to avoid losses as it will affect your plan.
Figuring out your time horizon is also important because you need to know if you could do without the money invested. Some investments like fixed deposits won’t allow you to withdraw your money until your agreed-upon tenure has ended. This is mainly because fixed deposits offer a much higher interest rate than your average savings account, so make sure that you do not need the money before investing. Essentially, don’t put all your eggs or money into one basket or in this case, investments.
Lastly, figure out if you’re ready to invest. You might not actually be at the right stage to invest because of other commitments or the lack of time to dedicate yourself to investing.
“The responsible way to invest is to take some time to do research and understand the different products. The brutal truth is most of us may not have that level of time to go read and study so many books or articles because we are caught up with our responsibilities like taking care of our children and family etc.,” Tang said.
“Find an investment platform that makes sense for your lifestyle. For example, though I like reading about money, I don’t necessarily have time to research individual stocks, so what I do is depend on a robo advisor – there are a couple in the Malaysian market right now because it’s a very simple and convenient way to invest. That kind of product really fits in with my lifestyle,” he added. There are currently three robo advisors in Malaysia: MYTHEO, StashAway and Wahed Invest.
After you have sorted out these important questions, then you’re somewhat ready to plunge into the actual investing.
What to invest in during a recession?
At the end of March 2020, investors’ asset preferences skewed between cash, bond, property and equity according to findings from Harveston Financial Group. (Image source: Harveston Financial Group)
Generally, when looking for stocks, investors should put their money into high-quality companies that demonstrate strong balance sheets, low debt, good cash flow and are in industries that historically have proven to do well during tough times.
At the same time, avoid highly leveraged, cyclical, speculative companies because they pose the biggest risk for performing poorly or going bankrupt.
“During a crisis, a majority of people tend to focus on gold and U.S. dollars, even if the latter is seeing negative yield and zero interest rates,” Phang said. “People still (favour) U.S. dollars because of its popularity, it’s on good terms and widely used as a trade medium. People invest in gold because they feel panicked.”
But under normal circumstances, Phang said, U.S. dollars and gold may not give the highest return or value. Instead, it would be more favourable to go into bonds, property, equity and commodity.
Phang wanted to emphasize that when it comes to choosing assets to invest in, there are no set preferences. Instead, a better investment approach, he believes, is to create a portfolio based on a mix of asset classes.
Based on historical figures and asset performances, Phang said, the S&P 500 index, U.S. Treasury securities, REITS, cash, gold, the Global High Yield Bond Fund, the Global Investment Grade, the MSCI EM index, commodities and the MSCI EAFE Index have all generally performed more consistently than other class assets. (Image source: Harveston Financial Group)
Asset classes are a group of financial instruments that have similar financial characteristics and behave similarly in the marketplace. However, different asset classes are expected to exhibit different risk and return investment characteristics, and to perform differently in certain market environments. This rationale is why diversification may be the safest strategy to take when investing.
Not happy with a certain asset class? Well, an investor’s portfolio, Phang said, is also likely to change according to the market conditions, which is largely influenced by market fundamentals, sentiment, and valuation.
| Immediate needs less than 3 months | Short term 3 to 6 months | Mid term 6 months to 3 years | Mid to long term 3 to 5 years | ||
| Risk tolerances | Preservation for liquidity | Conservative for capital preservation | Conservative for income preservation | Moderate | Aggressive |
| Type of investment | • Current account • Savings account • Money market | • Money Market • Fixed Deposit • Fixed Income • Local Bond Fund | • Direct Bonds • Asian Bond & Structured fix • Income Funds | • Balanced Fund • Dividend Fund • REITS Fund, Equity | • Asia Pac & China Focus Equity Fund |
An example of a crisis management portfolio (Source: Harveston Financial Group)
Diversifying one’s portfolio based on asset allocation, Phang said, is important because no single class of assets would remain high performing in the long-term. “If you just choose one (asset) over the other, over time, you might end up losing more than earning,” Phang said.
“For a balanced approach, you should understand your own asset allocation,” he said. And though there’s no winner-takes-it-all type of approach, Phang said, there are common portfolio profiles used by investors that have produced consistently high returns.
The key? To diversify based on asset allocation.
There’s concrete evidence showing that asset allocation is the most important factor that affects a portfolio’s performance. (Image source: Harveston Financial Group)
Asset allocation is essentially an investment strategy that aims to balance risk and reward by distributing a portfolio’s assets according to an individual’s goals, risk tolerance, and investment horizon, according to Investopedia.
This factor, Phang said, is where one must define their goals and time horizon, assess their risk tolerance, identify a mix of asset portfolios and create a target portfolio. Then finally select specific investments for the portfolio, before finally reviewing and rebalancing the portfolio.
There are four types of strategies for investors to take in order to build a stronger portfolio during difficult times. (Image source: Harveston Financial Group)
So with all the technical information overload, you may be wondering, which investment would be the most suitable for you?
Well, for a more relatable perspective, we asked Tang to share what he believes are the three best types of investment during a recession. He had previously shared his own portfolio in his recent blog post.
Go for more conservative assets
Unit trusts under Amanah Saham Nasional Berhad (ASNB), Tang said, is a good conservative option as it has historically demonstrated good returns. Last year Amanah Saham Bumiputera (ASB), one of the unit trusts under ASNB, generated an income distribution of five sen a unit and a bonus of 0.5 sen amid a challenging market environment. “I think people should put the majority of their assets into safe assets like this because even in the worse scenario, you are not gonna lose money,” Tang said.
The other good option, Tang suggested, is the Malaysian Employee Provident Fund (EPF) because it has produced consistent returns (4.5-6.9%) over the past 13 years. EPF is also required by Malaysian law to pay yearly dividends of at least 2.5%.
Another relatively good investment to consider during a recession are Exchange Traded Funds, Tang said. Just like a stock, it is traded on stock exchanges as well, but what makes an ETF different is that they track an index, a commodity, bonds, or a basket of securities.
“ETFs are not a sure guarantee because they can still go up and down,” Tang said. “An easy way to manage it is via a robo advisor (like Stashaway). For this kind of investment, you’re investing in a broad stock index, and if you look at the U.S. stock index, historically, it has gone up over time. Though it may go down because of the recession, over time it will be okay.”
In terms of what types of investment to avoid during a recession, Tang said, the general rule of thumb is to avoid any investment that you don’t have a fundamental understanding about.
“I’m not going to pick a specific investment because, if you take forex, for example, from my understanding, most people who invest in forex probably won’t make money but there is a small percentage of people who do understand and presumably have been able to make money. So it kind of depends on whether the person has sufficiently learned enough or gained enough knowledge about it,” he said.
Tang also dabbles in cryptocurrency investment, which many would consider a high-risk investment. “I am very interested in the technology and the asset itself. For me, it’s a very manageable risk and I am willing to put some of my investment in crypto because I feel comfortable with it,” he said. “That’s an example of a situation where maybe it’s not for everyone, but if you have put in the time to learn an experiment with it and you limit your risk, then it’s an appropriate decision.”
But both Phang and Tang emphasized that it’s always better to lean towards the more conservative assets, especially if one is not yet well-versed in investing and is still learning.
Final thoughts – play the long game
During this tumultuous and difficult period, it may be scary and counterintuitive to continue to channel your hard-earned money into the marketplace, but it will rebound over time. And taking it out might be premature if you’re playing the long game.
The best course of action, as investors, is to be prepared, remain vigilant, and hold out for the long game because it will pay well on the long-term. Being prepared also means, as an investor, you get to avoid joining the crowd of investors who sell or buy in panic.
Wherever you are in your investing journey, we wish you all the best and remember that investing is like riding a bicycle – to keep the balance, you must move forward. We hope you find this piece informative and helpful!
Disclaimer: Neither CompareHero.my nor the content on it is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. The content on CompareHero.my is for general information purposes only and is not intended to be personalised investment advice or a solicitation for the purchase or sale of securities.
Compargo Malaysia Sdn. Bhd. and/or its affiliates cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. CompareHero.my may receive compensation from the brands or services mentioned on this website.
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How Much Does It Cost To Get A Credit Card? Credit Card Fees Explained!
- By CompareHero.my
- August 13, 2020
There are always fees you have to bear when using a credit card. If you’re getting your first credit card, you don’t want to be overwhelmed by all of the costs involved. This includes an annual fee, cash advance fee, interest or monthly fee, balance transfer fee, late fee and more. Read this article to learn and understand what these credit card charges are all about.
If this is your first time getting a credit card, you may be surprised to learn that credit cards aren’t exactly free. You may have the assumption that credit cards only come with interest fees, and while you’re not wrong, there are multiple other charges that may show up in your statement if you’re not careful.
Don’t worry – there’s a way to avoid (almost) all of these. Before we begin, do note that this list is not the exhaustive list of credit card charges. Your bank may or may not have more charges, so for the full list, please check with your respective banks.
Contents
Credit card fees explained – for Malaysians!
1. Annual fee
Did you know that most credit cards come with an annual credit card fee? Like a membership card, you’ll be required to pay a certain sum with every year you use the card. This can easily range from a couple hundred ringgits to even a few thousand. There are certain cards that also come with an annual fee waiver if you spend a minimum amount in a year.
Don’t like paying annual fees? (That makes two of us.) There’s a simple way around this – just look for a card with zero annual fee (basically annual fee that’s waived for life).
At time of writing, there are over 50 zero annual fee credit cards on CompareHero. Take a look at some of them here.
The great thing about cards with zero annual fees is also the peace of mind that comes with it. If you’re looking to keep a dormant card active to boost your credit score, a card with an annual fee that’s waived will keep you worry-free from missing out on payments.
Read also: How Cancelling Your Credit Card Can Affect Your Credit Score (Instead Of Helping It)
While you won’t be able to read this in black and white from your bank, there have been multiple times when users get to waive their annual fees just by politely asking for it. “I literally just called my bank, said that the annual fee is steep, and asked them to waive it for me,” CompareHero reader Chan tells us. “True enough, they actually waived the fee for me!”
2. Cash advance fee
If you’re new to credit cards, you may not realise that you can actually use your credit card to get instant cash from the ATM. However, there’s a reason why this isn’t so popular, and that’s mainly because it’s pretty exorbitant.
Getting a cash advance will come with a one-time fee of 5% or RM20 (whichever higher) + an 18% p.a. daily interest fee.
It gets even more expensive if you’re using this overseas, as the charge will be converted through a currency rate. On top of that, you’ll be charged an administration cost of 1% (or a rate determined by the bank) for the conversion of the transactions!
Now that you know how steep the charges are, it’s always best to ensure you keep enough cash in your wallet and in your savings account. Oh, don’t forget to bring your ATM/debit card with you so you’ll always be able to withdraw from the ATM.
3. Interest fees
So by now you’d have heard of the notorious interest fees. In fact, in Malaysia, credit card debt is one of the main reasons behind bankruptcy among youths – albeit not bad enough to be #1.
When you take up a credit card, you will get an interest-free period of 20 days from your Statement Date, and applicable only if you make the full payment by the Payment Due Date. If you make a partial payment, you’ll be charged with finance charges from the day of your transaction.
What kind of financial charges, you ask?
Banks will start you off with a 15% interest rate per annum (or 1.25% per month). This will be the rate if you promptly settle your minimum payment amount for 12 consecutive months.
If you settle your minimum payment amount for 10 months or more in a 12-month cycle, you’ll be bumped up to a 17% interest rate per annum (1.42% per month). In case you can’t math, this bump-up isn’t a good thing – it’s quite the opposite actually.
If you don’t fall within the above categories, you’ll be bumped up to a whopping 18% interest rate per annum (1.5% monthly), the absolute maximum that a bank can charge you.
You could say that this tiered charge system seems pretty mean, but in actual fact, it’s put in place to discourage borrowers from growing their debt. The sooner you pay your dues (at least the minimum), the less your chances are of having to pay off more interest.
4. Balance transfer fees
Unfamiliar with balance transfers? This is basically a debt management solution for credit card users with overwhelming debt, where they transfer the outstanding debt from their existing credit card into a new credit card which offers a low (or even 0%) interest fee. They’re usually offered over a time frame between 6, 9, 12, or 36 months for repayment.
When you choose to do a balance transfer, take note that there may be an upfront fee of 0% to 5% (sometimes more) on the balance that you want to transfer.
Let’s say you want to transfer an outstanding debt of RM10,000 to your new balance transfer credit card. The bank imposes a 3% balance transfer fee. In your new account, your RM10,000 will now be RM10,300.
Regardless, a balance transfer will definitely help you save more instantaneously – especially if your current credit card interest is at 18%. To compare balance transfer credit cards to suit your needs, just head here.
5. Early settlement penalty
There may be times when you want to clear off your debt before the tenure ends. This is mostly pertinent to balance transfer credit cards.
So, let’s say you signed up for a 12-month tenure, but midway through the fourth month, you find out that you’ve inherited a million Ringgit from a random person. To clear off your remaining balance in the fourth month, you may be charged an early settlement penalty as the bank would lose out on your interest in the supposed months to come. This will depend on your bank, so check with them instead.
6. Late fee
On top of the interest fee, there’s also a late fee for when you, well, make your payment late. This charge would vary between banks, but it’s usually a minimum of RM10 or 1% of the total outstanding balance as at your statement date (whichever is higher).
You’ll be charged this interest rate until the balance you owe is fully paid. You may think that 1% doesn’t seem like a large amount, but if you make it a habit those charges can really add up.
There’s a grace period, and according to Bank Negara:
An issuer shall provide cardholders with a grace period of at least 4 calendar days after the payment due date. This is to cater for payment due dates falling on weekends or public holidays
BNM also states that these charges must not be added to the outstanding amount for computing the interest due to the cardholder.
7. Betting transactions
Did you know that if you use your credit card to purchase lottery tickets, chips at gaming casinos, off-track betting, and wagers at race tracks, your transaction will be treated as a Cash Advance transaction? All relevant Cash Advance fees and finance charges will apply.
8. Over-the-limit charges
It’s not uncommon to max out your credit card, but when you do that, you exceed your credit limit. In cases like this, you can be charged an over-the-limit fee. This fee will continue to be charged to your account until your outstanding balance is lower than your limit.
However, there are certain cards that don’t impose an over-the-limit fee – you will have to look at the fine print for these cards in order to find out.
Read also: How to Increase Your Credit Limit (Without Hurting Your Credit Score)
9. Service tax
Since 2018, our government has imposed a service tax on all credit cards. Governed by the Service Tax Act 2018, it requires all cardholders to pay RM25 per card, per year (or part thereof) for all activated/renewed principle or supplementary credit card.
If you upgrade or downgrade your card, you’ll be charged this service tax. However, you won’t be charged for replacement cards arising from lost or spoilt cards or fraud.
The great thing is that RM25 isn’t too big of a dent, but the bad thing is that this fee cannot be waived since it comes from the government. However, there are cards that will allow you to use your rewards points to pay off the service tax!
The best way to avoid all unnecessary charges is to practice good financial conduct
Pay your statement in full. Don’t miss your payments. Don’t be late. Don’t be unprepared when you travel around – always carry sufficient cash. Spend within your limits…. And the list goes on.
If you notice, these are just a few of the many good financial habits that we’ve been told over and over again by our parents and teachers. While you may not necessarily dodge every fee, with good discipline and conduct, you’ll definitely be able to save on unnecessary charges.
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#StretchYourRinggit – How To Survive A Pay Cut During COVID-19
- By CompareHero.my
- August 12, 2020
Ever since the Movement Control Order (MCO) was enforced, many employers were left with no choice but to deduct or cut the employees’ salaries. This has impacted many employed Malaysians to search for ways to survive financially. Read this article to find out how you can handle a pay cut during this pandemic.
If you’re one of the many affected by the COVID-19, chances are you have had the misfortune of being retrenched or have a salary deduction. As of June 2, a total of 12.7 million Malaysians are unemployed. The figure is expected to climb up to 2 million people according to Malaysian Employers Federation executive director Datuk Shamsuddin Bardan.
Or perhaps you could have just made a big career change, and in pursuant of your dream job, you agreed to taking a pay cut.
If you’re experiencing a reduction in your income, you may be struggling with meeting your commitments. So… what can you do?
You’d obviously know that you need to rebudget your monthly spendings. Rebudgetting is truly one of the best ways to handle pay cuts. But before you start, you need to do the following first:
Contents
1. Decide where you can trim your spending
What can you live without? In this period, you may want to consider trimming the excess spending that you don’t really need.
If your gym membership costs RM200, you may want to pause that until your finances improve later on. You can always work out at home to stay healthy during this difficult time.
Likewise when it comes to entertainment, shopping, and other lifestyle habits – cut back as much as you can, but perhaps not completely. You don’t want to live miserably too.
You can always try to find alternatives to your non-essential spending. If you’re used to shopping at high-end supermarkets and choosing what you want without really following a budget, you may want to consider shopping at a wholesaler mall where things are generally cheaper when bought in bulk.
Cut back on your restaurant and cafe visits at this point, too. It’s always cheaper (not to mention healthier) to cook for yourself, where you can easily whip up 3-4 meals with just a few simple ingredients.
And if you have vices, now would be a good time to start shaking it off.
2. Renegotiate the most important commitments
If you’re renting, consider speaking to your landlord about your current situation and see if you can renegotiate your terms. Try suggesting a payment plan that works for your new budget. You can suggest paying 50% less for the upcoming months, and when your salary is reinstated, to pay the full monthly rental fee plus a sum of your owing until they are cleared.
If you live alone, you can consider taking on a roommate to share the rent, or packing up and moving to a smaller place so you can still maintain your privacy.
If you have a mortgage, car loan, personal loan, or any other kind of loans, you can always speak to your bank to see how you can reschedule and/or restructure your loans. Here’s how it works:
- Reschedule – you negotiate a reduction of monthly instalment, and lengthen your loan tenure.
- Restructure – you completely change the existing terms of your loan, but this will come with additional cost on your end as it involves administrative and legal work.
This brings us to our next point…
3. Take up the COVID-19 relief efforts
As you would probably know by now, the Malaysian government and Bank Negara have introduced the COVID-19 loan moratorium for the general population.
Although it’s supposed to end in September 2020, there’s a 3-month extension for a select group of people – those who are unemployed and are unable to find a new job, and those who have had their salary affected due to COVID-19.
If you fall within this category, here’s is the main relief you can enjoy:
- Loan instalment reduction, proportionate to your salary and depending on the type of loan
- Can last for at least 6 months
- Potential extension at the end, depending on your salary
Other reliefs include:
- For hire purchase (car loans), you can get a revised instalment schedule according to the Hire-Purchase Act 1967
- For special circumstances deemed appropriate by your bank, you can also:
- Pay interest-only for a period of time
- Lengthen your overall period of the loan to reduce monthly instalments
- Get other forms of flexibility until your are in a more stable position
To apply, just speak to your bank from 7th August 2020 onwards.
4. Don’t miss your payments
With a paycut, it may seem disheartening to pay your bills. After paying off your commitments, what you’re left with may be little or close to nothing.
But you should always put your bill and commitment repayment as your top priority. Don’t miss your payments – not even for a month – as doing so may get you in big trouble.
For one, missing your payments will show up in your credit report. This may tank your credit score and make it difficult for you to get financing help in the future.
Another really important thing – missing your payments have serious consequences to your finances. If you’re not paying off your credit card balance, you’re going to snowball your debt with the notoriously high credit card interest rates (from 15% p.a.).
Missing payments for utilities, internet, phone, water, and all may also leave you handicapped as you may have your sources cut until you pay off your debt. That will leave you with a huge inconvenience, so be sure to pay your bills on time.
Read also: Find Out What These Credit Reporting Agencies Say About Your Credit History
5. Keep saving – no matter how little you can
You may have used your emergency fund to help you weather through this change, but if ever possible, continue the habit of saving. (Or start now if you haven’t already!) Having a growing emergency fund helps you avoid taking up unnecessary loans to help you stay afloat.
Even if you have to slash your savings contribution by half or more, or even if you have to save as little as RM50 a month, you should continue to do so. Be sure to put your savings into an interest-generating account instead of saving it as cash in your coin box. You will have something to gain at the end of the day, regardless how small it may seem.
6. Upskill and look for a second income
The best way to survive a pay cut would be to find a secondary income source. Some people freelance according to their skillset, some find other means – like moonlighting as a delivery driver or helping out at the wet market.
At this point, it would also help to upskill yourself. There are many free resources and classes available online which you can learn a thing or two from. By upskilling yourself, you can also look for a new job with a better salary.
Read also: 8 Side Jobs for Malaysians to Earn Extra Money During CMCO
What you’re going through isn’t permanent
It’s a difficult time for the world, and you’re not going through this pay cut alone. But keep your chin up because you can still make decisions to better your situation – either by finding a better paying job, or finding ways to work around your current situation.
The most important thing right now is for you to assess your finances, set a new budget, and stick to it. A budget helps you keep track of how much money you have coming in, or lack thereof, and how much money you’ll need to cover costs or have spent while you’re going through unemployment. It’s a useful tool to help you not only manage your finances better, but also plan your financial future. It allows you to stretch your ringgit by getting the most out of your money.
Until things get better, we wish you the best of luck as you weather through these changes in your life!
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