3 Requirements You Must Meet Before Applying For A Credit Card
- By CompareHero.my
- November 3, 2021
Previously, we wrote on the benefits of having a credit card and where you can get a suitable one for yourself. You can give that article a read below:
Related: 5 Good Reasons You Should Apply For A Credit Card
In this piece, we’ll be looking at what you need to qualify for a credit card as well as the process of getting one, in general. It’s important to ensure you meet these requirements because if you don’t and your application gets rejected, you can be barred from reapplying for about 3-6 months. However, how this is implemented and the duration of it will depend on the bank.
Now let’s just say you’re browsing through CompareHero.my for some credit cards and you find a couple that you like. What’s next?
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1. Make sure you meet the salary requirements
First things first, before you click that ‘Apply’ button, ensure that it’s the right card for your salary bracket. It goes without saying that if you apply for one that has a higher income requirement than what you’re earning, your application will be rejected.
Some cards require a monthly income of RM2,000 while for others, it can go up to RM5,000. To make your credit card search on CompareHero.my easier, you can filter cards by annual income. This way, you can just look through cards you’re eligible for.
2. You’ll have to have a good credit score
Besides having a steady income stream, you’ll also need to prove that you’re good with repaying your debts. This can cover anything from smaller personal loans to more major housing or car loans.
Paying off your financial obligations on time will result in you having a higher credit score, which in turn will increase the chances of your credit card application getting approved. Other things that affect your credit score include how long you’ve taken a certain loan for, how many loans you’re currently paying off, how much you have left to pay, and so on.
Again, to avoid disappointment and lower the risk of your credit card application being rejected, check to ensure that your credit score is healthy first.
Related: 6 Ways To Improve Your Credit Score
3. Age does matter sometimes
It might not seem like a big deal, but one of the main prerequisites to getting a credit card is being in the right age group.
For most credit cards, the minimum age for a principal card is 21 years, while for supplementary credit cards, you’ll need to be at least 18 years old. There may be some banks or financial institutions that may have other age requirements, so to be safe, do check with them before applying.
How is a credit card application processed?
So let’s say you meet all the requirements set above—great! You can now proceed to apply and sit back and relax. Now what happens after you hit that ‘Apply’ button?
The financial institution you’re applying from will double check the information on your application, and they might contact you if further details are needed. Once your application is processed, you’ll hear back in a few days. You’ll then find out whether it was approved or rejected.
When you apply at CompareHero.my, the process is very simple as it’s made up of just two steps. Fill in your name, phone number IC/passport number and monthly income, hit send, and you’re done! You will be then contacted by a customer service agent who will take it from there.
And that’s pretty much all you need to know about how to get a credit card. Do note that if you apply externally with the bank itself, the process can vary from one place to another. When picking a credit card, remember to go with something that fits your budget and at the same time, gives you enough rewards.
Want to check out some exciting credit card deals that give you a free gift? Click the link below!
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11 Things You Should Know About Your Savings Account
- By CompareHero.my
- November 2, 2021
Savings accounts are one of the most commonly used bank accounts in Malaysia. Even though this product category is relatively straightforward, there are still some things you might not know about savings accounts. To help you out, we have written a short guide to familiarise you with the ins and outs of savings accounts in Malaysia.
Contents
- What is a saving account?
- 1. How do saving accounts work in Malaysia?
- 2. Does a savings account generate interest?
- 3. What is the average interest rate for savings accounts in Malaysia?
- 4. Are your deposits safe with a savings account?
- 5. How to find the savings accounts with the best interest rates?
- 6. Can you freely deposit and withdraw money in your savings account?
- 7. What is the difference between a current account and a savings account?
- 8. How do I open a savings account?
- 9. Which types of savings accounts are there?
- 10. Does a savings account have disadvantages?
- 11. Do I have to maintain a minimum balance on my savings account?
What is a saving account?
A savings account is a bank account that you can use to generate interest on your money. It is one of the safest forms of investment, but also has a significantly lower interest rate than, for example, fixed deposit accounts. A savings account allows you to freely deposit and withdraw money whenever you choose without penalties.
1. How do saving accounts work in Malaysia?
You can apply for different saving accounts through the website of the banks listed. The bank will open the account for you and this account will have a predetermined interest rate. Some banks have a tier system, where they offer different interest rates depending on the size of the deposit. Savings accounts are generally meant to give you a small incentive for keeping your money at the bank. The interest rate is not high enough to make it a serious investment option.
2. Does a savings account generate interest?
Yes, savings accounts generate interest on your deposit. If you have a savings account with an annual interest rate of 1% and you deposit RM 5,000 at the start of the year, you will receive RM 50 in interest at the end of the year, assuming you did not withdraw or change your RM 50,000 deposit for the entire year.
3. What is the average interest rate for savings accounts in Malaysia?
As of October 2021, interest rates for savings accounts in Malaysia range from 2-4%, which is a result of a comparison of 65+ savings accounts across all major banks in Malaysia.
4. Are your deposits safe with a savings account?
Yes, your deposits are very safe in a savings account. Most banks in Malaysia are a member of Perbadanan Insurans Deposit Malaysia (PIDM), which is an insurer that automatically insures depositors against closures of the bank, up to deposits of RM 250,000. That means that if the bank closes, the PIDM will give you a full refund on your deposits. However, the chance that major banks in Malaysia will fail is very small. The last big failure in the Malaysian banking world happened during the Asian Financial Crisis in 1997 and even then, most of them were recapitalized by Bank Negara. All in all, you can be fairly sure that nothing will happen to your savings deposits.
Related: Transferred Money To The Wrong Bank Account? Here’s What You Should Do
5. How to find the savings accounts with the best interest rates?
You can use the lists in this article to find the savings accounts with the best interest rates in Malaysia. Depending on your personal finance situation and your credit rating you might be given a different interest rate. Also, your interest rate might differ based on the size of your deposit.
6. Can you freely deposit and withdraw money in your savings account?
Yes, a savings account allows you to freely withdraw and deposit your money. However, if you do intend to generate interest on your savings through a savings account it is not recommended to withdraw and deposit your money. That being said, a fixed deposit might be a better choice in that case.
7. What is the difference between a current account and a savings account?
The main difference between a current and a savings account is that a current account does not give you interest on your deposits while a savings account does. Secondly, a current account is more easily accessible than a savings account, which matches with how these accounts are meant to be used. You would use your current account for day-to-day and small deposits and withdrawals, while you use your savings account to accumulate interest on excess money, with less frequent deposits and withdrawals.
Related: You Can Have 4 Types of Bank Accounts in Malaysia, But What’s Right For You?
8. How do I open a savings account?
With most banks, you can open a savings account online. If you are applying for a savings account with a higher interest rate, you might have to go to the branch yourself to finish the application, but generally, the application process is not as rigorous as for example a credit card application.
9. Which types of savings accounts are there?
Savings accounts in Malaysia can generally be categorised into six categories:
- High interest – High-interest savings accounts are the most sought after, but also the hardest to obtain. To participate, you often have to be a long-time customer of the bank and have a significant capital base. Minimum deposit requirement for these savings accounts can be as high as RM 200,000.
- Basic accounts – These savings accounts are generally easy to apply for and quick to use. However, the increased flexibility means that your interest rate will be relatively low.
- Junior accounts – These are special savings accounts that parents can open for their kids. These accounts incorporate features that allow parents to send a periodic contribution to their kid’s savings account.
- Teenager accounts – These savings accounts are best suited for teenagers. Teenager accounts can include special benefits such as cash rewards when the account holder passes degree level exams.
- Senior accounts – These savings accounts are designed for senior citizens, usually above the age of 50. They include a minimum balance and a relatively high-interest rate.
- Islamic accounts – Islamic savings accounts allow you to benefit from Shariah-compliant savings products that do not offer interest but instead generate profit through Sharia-compliant activities.
The different types of savings account are mainly centered on age, the amount of capital and use of money. Depending on where you fit into these categories, you might prefer one saving account over the other. These categories are not exclusive, but each savings account might fit one or two of these categories. For example, a savings account could be a high-interest senior account or it could an Islamic teenager account. There are a lot of options.
10. Does a savings account have disadvantages?
A savings account can have several disadvantages depending on how you look at it. If you view savings accounts as an investment then it is a bad option because the return on a savings account is so low. The interest rate on a savings account is very low and even that small return might be eaten up by annual fees and transaction costs.
Secondly, not all savings accounts are accompanied by a debit card. This means that you will only be able to transfer money to and from your savings account through online banking or a branch visit. You will not be able to use the money in your savings account to receive funds from an ATM or to pay at stores. It might, therefore, be a better idea to get a savings account with the same bank that manages your current account or vice versa. This makes your savings a lot cheaper and easier to use because most banks allow you to transfer funds between your current and savings account without any charge, but only if both accounts are managed by the same bank.
11. Do I have to maintain a minimum balance on my savings account?
In some cases, you might have to maintain a minimum balance on your savings account. This is mainly the case for higher interest savings accounts. If you do not maintain a minimum balance, you will lose the effective interest rate that accompanied the savings account. It is important to thoroughly read the terms and conditions, so you know how much money you have to keep in your savings account.
We hope you found this article insightful! Want more information on how interest rates for savings accounts work? Check out our detailed article on this below:
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Budget 2022: 5 Key Highlights And What You Get From Them
- By CompareHero.my
- November 1, 2021
As most of us know, the 2022 Budget was just announced last Friday. RM332.1 billion will be allocated towards this budget and it will cover various sectors such as education, healthcare and technology, to name a few.
There’s a lot of information you would have to sit through, but if you want to check out the full list, you can do so in the link above. In this article, we’ve highlighted the key takeaways from 5 important sectors, and how these might affect you.
1. Families and households
Understandably, this would be the category most people would be looking out for. As Covid-19 has affected and continues to affect thousands of families, the government has put in several measures to aid them financially.
So, what are they?
Let’s start off with the new cash aid scheme known as Bantuan Keluarga Malaysia (BKM). Under this initiative, RM8.2 billion will be allocated to benefit 9.6 million recipients. It’s quite a lot to digest, so we’ll break it down for you:
If your household income is less than RM2,500 per month, you can get:
- RM2,000 if you have 3 or more children
- RM1,500 if you have 1-2 children
- RM 1,000 if you don’t have any children
On the other hand, if your monthly household income is RM2,501-RM5,001, you’ll get:
- RM800 if you have 3 or more children
- RM600 if you have 1-2 children
- RM400 if you don’t have any children
Besides all of the above, single parents will get a RM500 one-off payment under this scheme. If you’re a senior citizen, you’ll receive a payment of RM300.
Other initiatives that are under Bantuan Keluarga Malaysia are a 50% or RM150 subsidy for baby car seats for B40 families, as well as an allocation of RM24 million to help urban poor kids through food & malnutrition rehabilitation programmes.
Related: T20, M40 And B40 Income Classifications In Malaysia
At the time of writing, there is no information on when these payments will be made. Your information will automatically be transferred to the BKM system if you had previously been rejected from getting the Bantuan Prihatin Rakyat, Bantuan Khas Covid due to already having a Geran Khas Prihatin.
If you fall within the categories mentioned above, make sure you update your tax information, as this is what will be used to determine your household income. In the meantime, keep your eyes peeled for any more announcements from the government regarding this.
2. Jobseekers
As of August 2021, the country’s unemployment rate stood at 4.6%, which essentially accounts for 748,000 people. While things are slowly improving in the job market, there are still many who haven’t been able to secure employment.
On that note, one of the first initiatives for jobseekers is known as JaminKerja, where RM4.8 billion will be spent to guarantee 600,000 job opportunities nationwide. The next initiative is known as MyStep, and here, 80,000 job placements will be made in the public sector and government-linked companies.
Want to pick up a course so you can be a more saleable employee? Then you might be happy to read the following.
The government will spend RM6.6 billion on Technical and Vocational Education and Training (TVET) as well as give tax exemptions of up to RM7,000 for courses taken from accredited professional bodies. There’s also an RM2,000 tax exemption for expenses on upskilling courses.
An additional RM1.1 billion will be given for training & upskilling courses, and this is expected to benefit around 220,000 trainees. In an effort to get more women to join the economic sector, RM5 million will be set aside for the Women Leadership Foundation.
You won’t have to apply for any of the above, as the funding will be provided to the relevant parties who can provide jobs, courses, training, and so on. But in order to get the tax exemptions, make sure you fulfill the set criteria, such as signing up for a course at an accredited institution.
3. Health sector
The Health Ministry is receiving the second-biggest portion of the budget; RM32.4 billion to be specific. This time around, the budget is more focused on mental health care. For starters, RM70 million will go to mental health programmes and support alone. There’s also going to be a wider scope of income tax exemption for health checkups including consultations with psychiatrists, clinical psychologists and licensed counsellors.
Mental health is just as important as physical health, and having sufficient access to mental health care is crucial. Hopefully, with these initiatives, more and more people who are struggling will get the help that they need. If you don’t know where to start or where to go, you can check out some affordable mental health service providers below.
Related: 11 Affordable Mental Health Service Providers In Malaysia
Besides these, from the RM32.4 billion, RM4 billion will be dedicated to COVID-19 management. Of the RM4 billion, RM2 million will be spent on vaccines, and another RM2 million will be used for public health facilities and necessities such as test kits, personal protective equipment and medication.
RM100 million from the healthcare budget will go towards sponsoring 3,000 contract medical and dental officers to pursue specialist programmes.
4. Education sector
The education sector got the lion’s share of the budget, just like it did in Budget 2021. The government has decided to allocate RM52.6 billion for the Education Ministry and an additional RM14.5 billion for the Higher Education Ministry.
If you’ve taken a PTPTN loan, we have some good news as you’ll be eligible for some loan discounts from now until April 2022. For those who pay off their full loans, a 15% discount awaits you. However, if you pay at least half of your outstanding balance in a single payment, you’re eligible for a 12% discount. Meanwhile, those who pay via salary deductions or a direct debit can get a 10% discount.
In terms of student aid alone, RM450 million has been set aside, and this will cover several initiatives. There’s the PerantiSiswa Keluarga Malaysia scheme, whereby students in B40 households will receive one tablet each. We also have the eStart Programme, where 2 million students are set to receive RM150 worth eWallet credit each. Early education assistance is also set to increase to RM150 from RM100.
RM400 million from the main budget will be used specifically to provide children with free milk daily under the free school meals programme. Besides that, RM50 million will be spent on teaching equipment to improve school facilities for those with special needs. 400,000 teachers will also receive a one-off payment of RM100 each under the Special Incentives for Teaching Aids.
There are also several budgets to fix and repair school buildings, such as:
- RM1 billion for maintenance & repair works for schools
- RM140 million to JAKIM for school maintenance works for tahfiz schools, sekolah agama rakyat & registered sekolah pondok
- RM120 million for maintenance and improvement work for 1,800 Tamil and Chinese vernacular schools
- RM746 million to repair and upgrade dilapidated schools
5. Tourism sector
It goes without saying that the tourism industry has been one of the most deeply affected since last year. Forget travelling overseas, even local tourism was not possible until recently. Before we get into the details of how much is being allocated for this industry, what will really excite you is that the RM1,000 tax rebate for domestic tourism that was announced last year will now be extended until 2022.
Now coming back to the bigger numbers, the government will be allocating RM1.6 billion for the tourism industry. RM600 million will be given under the Penjana Tourism Financing and BPMB Rehabilitation Scheme. For the 20,000 tourism operators who have been financially affected, a 3-month special assistance that adds up to RM85 million will be given.
A lot of hotels haven’t had as many guests as they used to pre-Covid, and many of them might need a lot of upscaling work. Therefore, for 738 budget hotels and homestays that are registered under the Ministry of Tourism, Arts and Culture, RM 30 million in matching grants will be given. Another RM50 million in matching grants will be handed out to companies to organise arts and culture-related programmes
To encourage more activities to promote domestic tourism, RM60 million will be allocated for this purpose, and another RM20 million will be spent to revive Malaysia as an international health tourism destination.
Besides the RM1,000 tax rebate mentioned above, the exemption on entertainment duty, including for theme parks and cinemas in all Federal Territories and tourism tax will be extended until 31st December 2022. If this makes you want to go on a holiday, check out these budget-free hidden gems within Malaysia you can pay a quick visit to!
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Having Trouble Handling Foreign Exchange Payments? Apply for BizChannel@CIMB Today!
- By CompareHero.my
- October 29, 2021
The world is slowly opening up again, and that means many businesses will resume their operations. This will lead to businesses trading internationally again and with that, the need for foreign exchange will arise.
Dealing with foreign exchange in itself can be a hassle sometimes. And if you’re a business owner, ideally, you would want to choose the most effective way of getting something done—especially when it comes to payments. So, if at present you’re having trouble with booking foreign exchange contracts seamlessly, this article is for you.
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Say hello to BizChannel@CIMB!
If you already have a BizChannel account with CIMB (better known as BizChannel @CIMB), you would know that it is a one-stop solution for all your business needs: you can transfer funds, retrieve account statements, manage payments & payroll. It is one of the many ways CIMB is able to help SMEs in Malaysia to be more efficient operationally.
Related: Here’s How CIMB Is Helping Malaysian SMEs Become More Sustainable In The Long Run
Besides all of the above, BizChannel@CIMB also allows businesses to book foreign exchange contracts digitally—provided they have a Booker FX role access granted in the account. All this while, in order to get this feature, you’ll need to manually sign up for the Booker role.
For now, if you’re under the Customised Package, you’ll need to be granted access by the System Administrator. And if you have the Lite/Standard Package, you’ll need to fill up the BizChannel@CIMB Maintenance Form.
But, this will change.
Booking foreign exchange contracts made easy
CIMB wants to make your life as a business owner better. Hence, the booker role is now readily available and you may either sign up for the booker role in your existing BizChannel package or contact our Helpdesk to add this to your package.
With this change, you will be able to book foreign exchange contracts easily as well as make foreign exchange payments fuss-free. Some other perks of this feature include but are not limited to:
- the ability to monitor real time foreign exchange rates
- locking your desired foreign exchange rates easily
- being able to make payments on the same day
Sounds good? It sure does!
Related: Ask The Expert: A Beginner’s Guide To Forex Trading – How Does Forex Trading Work in Malaysia?
After reading all this, you’d already know that this exciting feature is only available to BizChannel@CIMB users. If you are already one, then great! But if this is the first time you’re hearing of it and you’d like to get all these benefits, here’s what you can do.
Where can you sign up for BizChannel@CIMB?
It’s super easy to get your own BizChannel@CIMB account. There are two ways you can do this, depending on whether you are a CIMB Business Customer or not.
Non-CIMB Business customer
Start off by opening a CIMB Business Current Account-i. Once you’re done, you can apply for BizChannel.
CIMB Business Customer
Contact CIMB to apply for any of the BizChannel@CIMB Packages.
BizChannel@CIMB is secure, as it uses a 218-bit Secure Socket Layer (SSL), it has two-factor authentication, it’s convenient and it’s flexible. We could go on and on telling you about this, but you get the drift: BizChannel is here to help SME owners in Malaysia operate more efficiently.
And together with the FX Booker role, you’ll get to work more smoothly and safely when it comes to foreign exchange payments. Interested to sign up for BizChannel@CIMB? Just click the link below!
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Want To Be A Loan Guarantor? 3 Risks You Should Be Aware Of
- By CompareHero.my
- October 28, 2021
Have you ever been asked to act as a guarantor for someone else’s loan? Often it is a partner or relative who asks, but nowadays it can also be friends or work colleagues. And, if it is for your family members, you will find it difficult to refuse.
Being a guarantor can actually be a great way to help someone you know to take out a loan when needed. A guarantor acts as a third party offering security for the loan, mainly through ownership of a property, and a strong credit history.
Related: 6 Ways To Improve Your Credit Score
While guarantor loans are a valuable way to help the borrowers, there are some risks that you need to take into account. Before you step in and agree to become one, you should understand the risks and see whether or not you are comfortable with it. Let’s look at 3 noteworthy risks that you must be aware of.
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1. It can affect your future loan prospects
Generally, when you act as a guarantor, you are responsible for making the repayments if the borrower fails to do so. By bearing the guarantor’s responsibilities, your eligibility for new loans automatically gets reduced. What’s more, you may face the situation where your own loan gets declined, because the bank may have calculated that you can’t afford the repayments on both loans if you are required to do so.
In the worst case scenario, you may have to fully repay the loan if the original borrower defaults. And if you refuse to pay, you will also be declared as ‘defaulter’ and the bank can exercise its various options to recover the amount owed, such as the seizing of your assets.
2. You risk bad credit history
Your credit report will display the fact that you are acting as the guarantor for a loan. In fact, the borrowing banks will already have had access to your credit report when you applied to become a loan guarantor. In the event where the borrower defaults, this will then be reflected in your credit report and the bank may come knocking at your door to recover the outstanding amount.
And what does this mean? Well, the next time you want to take a loan, you will struggle to borrow from any major banks as they generally do not lend to applicants who have a bad credit history.
3. You are legally tied to the loan, regardless of circumstance
Just as none of us can predict our own future, it is even harder to know what is in store for others. It’s not a nice thought, but unfortunate event do happen. Friends, colleagues, even family members, for whatever reason, can have a major fall out and no longer wish to be associated with each other. Some of the more common problems are divorces, business failure and trust issues.
So, what happens to the loan you ask? Since you are the guarantor, you can definitely approach the bank and ask to be removed. But, depending on the amount that needs to be repaid, the bank is legally entitled to say “no” to that because you are still tied to the loan and you will have to bear the responsibilities.
What should you do?
Now, don’t get us wrong! We are not discouraging you from being a loan guarantor, but we strongly recommend that you give it great consideration and thought. Talk to professionals if you feel uncomfortable, and never feel pressured into becoming a guarantor. Avoiding the risk of financial liability even at the cost of creating friction with your family members or friends does make sense in this situation.
Remember, by being a loan guarantor, you are not only risking your own, but also your immediate family’s future.
There are many issues to consider, but it shouldn’t stop you from offering to help if you really want to – just make sure that you understand the risks of being a guarantor and explore all the other options that you have. Consulting with the bank or lending agency prior to becoming a guarantor is vital to ensure that an agreement is drawn up where all parties understand the risks involved.
Before you sign up to be a guarantor, ask the party who’s taking the loan if they’re opting for the right type of loan. Loans that are more suited to the borrower’s needs and repayment abilities will help lower the risk of loan defaults. At CompareHero.my, you can compare between and choose the best type of personal loans. For more information, click the link below:
