How Do Balance Transfers On Credit Cards Work?
- By CompareHero.my
- July 8, 2021
We’ve spoken a lot about the importance of getting out of credit card debt, but how do we actually do it? Well, here’s one strategy; a credit card balance transfer. This strategy might be foreign to many people, hence this article is specifically designed to answer those questions.
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What is a balance transfer?
A balance transfer is officially defined as the action of moving your balances from one or multiple credit cards to a single card that offers a lower interest rate for a fixed period of time. With a low interest rate, sometimes you can even see balance transfer offers at a 0% introductory interest rate.
When used wisely, this consolidation technique can make it easier for you to be on top of payments.
In theory, a balance transfer can help you save a lot of money while you buy some time to pay off your debt. But, in this capitalistic world, credit card companies don’t just do it for free; there might be associated incentives as a way to make them money.
The psychology of balance transfers
Although many credit card companies do offer a 0% introductory interest rate, that % can grow exponentially after the introductory period. Because of that, if you don’t stick to your initial plan and pay that debt off, you’ll end up with even more debt really quickly.
This detail in the fine print gets glazed over easily and people get too comfortable seeing the “new” lower interest rate, thinking they’ll have more time to pay. So it’s really crucial that you know this information and don’t get complacent with a short-term benefit.
How to do a balance transfer safely?
By a safe balance transfer, we mean doing it responsibly so that you’re not caught off guard with the details.
1. Create a payoff plan
In other words, this is your strategy to pay off your balance in full before the introductory period expires.
Calculate how much you need to pay off your balance, down to the penny because if you can’t, you’ll most likely end up paying more and it defeats the purpose of a balance transfer.
2. What are the balance transfer fees?
Another important question to ask is, “How do credit card balance transfers work in terms of fees?” Generally, balance transfer agreements require you to pay a percentage of your balance, labelled as processing fees.
Then another question follows, “Is it worth it? Is the money I’ll save more than the balance fee?” After all, what we’re trying to do is to achieve net savings. But occasionally, you’ll be able to find balance transfer programs with no transfer fees.
3. It’s not an excuse to go shopping
A balance transfer is arguably one of the last measures you can take to minimise your outstanding balance and interests. It is not an excuse for you to hit the mall just because the interest rates are 0%. When you add more and more to your credit card tab, the debt hole just becomes deeper and deeper and further prevents you from paying it off.
Because you also have to think about “What if I still can’t pay off my balance after the balance transfer? What do I do then?”
Alternatives to a balance transfer
1. Consider paying off your balance on this card
Remember, credit card companies are out to make money, so the more you can’t pay back, the more they’ll make, and a balance transfer is just one of their ways to do that. A balance transfer program is a strategy for them to maximise the amount of money you’ll need to pay them.
If your gut feeling or your calculation tells you that it’s not worth it, just don’t do it.
2. Negotiate for a lower rate
Again, this goes back to your history, credit score, and the relationship you have with your issuer. Sometimes, your issuer might offer a promotional rate or allow their clients some leeway. One thing for sure in this case is that if you don’t ask, you’ll never know.
Be cautious
Be extremely cautious with using balance transfers, despite how good they might sound to you. Credit card companies don’t just come up with a product for the sake of coming up with it, they’re out to get your money. It’s very easy to get sucked into a new card for the rewards, cashback, along with all the bells and whistles.
It doesn’t matter what it is; you have to make it work in your favour. If you have a plan already, then this could be the tool you’re looking for, but if you don’t, start by building more solid budgeting habits.
Click here to find out how to get the right credit card for you:
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Here’s How You Can Contribute to The White Flag Campaign
- By CompareHero.my
- July 7, 2021
If you’ve been following the news, you would know that there’s something called a ‘White Flag’ or ‘Bendera Putih’ campaign. It all started with one social media post that asked Malaysians in need of food and other necessities to put a white flag outside their homes.
Seeing this flag as a call for help, others would be able to supply them with groceries and other necessities. This movement has now grown and many families have been able to receive help from neighbours and other members of society.
Now, you might have already seen some white flags around your area…or perhaps you haven’t seen any at all and you’re wondering where they might be. If you’d like to locate these houses that are in need of help, here are some avenues that are available to you:
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1. There’s an app just for this
It can be difficult to locate white flags, especially if you live in an EMCO area and can’t move around much. Thankfully, a group of students actually came up with an app for this, just to make finding white flags easier.
It used to be known as just benderaputih.app, but it was recently renamed to Sambal SOS. All you need to do is click here and login with your Google Account. You’ll then be able to see if there are any white flags in your area.
Do note that this is not an app you can download from the App Store or Play Store, but you can use it in a web browser.
2. Contact supermarkets that have joined the cause
You might have located a white flag but be unable to help the family yourself. Worry not! Fortunately, some supermarkets/hypermarkets such as 99 Speedmart, Econsave and Mydin have also offered to provide groceries to families in need. Some of them have even set up hotlines for this purpose which you can find on their social media pages.
All you need to do is to let them know where you saw the house with a white flag by sending an address or picture of the house. The nearest supermarket will then send some essentials to them for free.
3. Contribute to NGOs and charities
If you’re finding it hard to actually go out and help, or you would prefer to donate money instead of food items, you can reach out to some established channels such as NGOs or charitable organizations.
There have been many of them that have joined the cause since its inception. Some of them can be found here. You can also search up #benderaputih on social media or Google “whiteflag NGO” and you will come across some more organizations that are accepting donations. These donations will then be used to purchase and distribute groceries.
It’s always good to verify that those collecting donations are actually legitimately helping the cause, so ask for receipts/ other relevant proof if you can.
4. Find out if there are drop-off points near you
No white flags in your area? You might find food banks or drop-off points instead! There have been several shops and places of worship that have set up little corners on their premises to collect/distribute food so that those who need them can come whenever to take them.
If you don’t know which house to specifically give to, you can drop off groceries at these places instead. And if you wanted, you could even make a weekly or bi-weekly commitment to donate to these places consistently, so that you can help out more families.
Again, do be mindful of EMCO rules and be careful not to exceed the stipulated travel distance if you plan to drop-off some groceries.
Related: 5 Supermarket Store Brand Items That Can Save You Money
5. Set up your own food bank outside your home
If you’re worried about having to move around, the simplest thing you can do would be to just set up a little station outside your own home. In fact, some Malaysians have already started this initiative. This is a good way to help right from where you are, without having to be in contact with anyone (hello, social distancing!), especially since the Covid-19 cases are at an all time high.
There may be other ways you can help your own community; it all depends on your own creativity. If you have other ways to contribute to this, go for it (and maybe let us know in the comments as well).
Related: 6 Places In Klang Valley To Donate Your Preloved And Old Clothes
If you didn’t already know, there’s also a Red Flag Campaign. Red flags are put up by pet owners who don’t have enough food for their furkids, so if you spot one, you can also send some pet food over to them.
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5 Types Of Insurance You Need But May Not Have
- By CompareHero.my
- July 6, 2021
One of life’s harshest realities is that we can never turn back time. Along with this is the fact that there is an infinite number of events that might go wrong that we might not be prepared for. Sometimes, it’s less severe, but sometimes, these events can really make a dent in our wallets, so much so that it completely impacts our lifestyle.
That’s what insurance products aim to solve. Terrible events come few and far between, but all it takes is one to send your personal finance in a downward spiral. So, think of insurance as this protection for your wallet and use the right types of insurance to save you that time and trouble.
The way insurance works is through the exchange for money (premiums) in return for coverage. But before you dive into signing up for insurance coverage, make sure that it makes sense for you to do so. To help you with that, here are six types of insurance you need but may not have.
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1. Life insurance
If you’re still in your 20s, living with your parents, or don’t have anybody depending on you, then you can probably skip life insurance. But if someone else might be in trouble in the case where something unfortunate happens to you, then this policy is a must.
Life insurance is a lump sum that will be transferred to your dependents in the event of your death. As to how much that amount is, that depends on you. It then breaks into two subcategories — Term life insurance and whole life insurance.
Related: What Is The Difference Between Life Insurance And Medical Insurance?
Term life insurance
As the title suggests, term life insurance covers only a specific number of years as long as you pay your premiums and keep your policy alive. However, the catch is the premiums may get more expensive as you get older.
Whole life insurance
As the title suggests again, whole life insurance covers your entire lifetime and may also come with benefits such as savings or investment accounts that are associated. The cash value in these accounts may get credited to you over time, but this type of insurance may come at the cost of a more experienced premium.
Related: List Of Top Life Insurance Companies in Malaysia
2.Permanent disability insurance
Permanent disability insurance covers you by replacing your income in the event where something happened and you’re unable to work due to permanent or temporary disability. When compared to life insurance, it’s always a good idea to get disability insurance to ensure you have a means of surviving.
Many employers do provide this as one of their employment benefits as they can also lower their costs during the period in which you’re unable to work. As general advice, it’s best to pay a small amount of premiums to avoid tapping into your emergency funds.
3. Renter’s insurance
If you’re renting at the moment, you’re not responsible for the building itself or for any major repairs—your landlord is. But you still ought to consider a renter’s insurance as it covers your valuables within the property.
Breaking it down, renter’s insurance protects you from disasters like flooding, fire, earthquakes, and break-ins. Keep track of how much your items such as electronics and musical instruments cost because you don’t want to overpay for the protection. If your items are not too expensive, then it wouldn’t really make sense to pay those monthly premiums.
Related: What Is Malaysia’s Rent-To-Own (RTO) Scheme All About?
4. Homeowner’s insurance
A homeowner’s insurance is the opposite of a renter’s insurance. The idea is that you can never be too careful because major events don’t come with any warning. And the rule of thumb is, unless you can replace every single item in your property easily, you should get homeowner’s insurance.
Typically, it covers the physical structure of your property, such as the walls, roof, fixtures, fittings, and outbuildings. But in addition to that, you might also want to consider the add on such as mortgage loan insurance, landlord insurance, home maintenance cover, and even the Malaysian special insurance labelled “Kampung House Insurance”.
Related: 5 Ways To Make Extra Money By Renting Out Unused Space
5. Identity theft insurance
As you already know, we’re only at the beginning of the digital era. That means the number of fraudulent accounts, scams, and identity thefts has yet to reach its ceiling. Identity theft is when someone else uses your personal information to either embezzle your funds, commit fraud, or criminal acts.
Because it’s your identity that is used to commit these acts, you’ll be the first suspect during the investigation. What comes after is the cost of handling this issue, lawyer fees, and possibly more.
An identity theft insurance aims to help cover this cost for you. It may even save you hundreds or thousands along with countless hours in an event like this.
Besides all of these, car insurance is something you should compulsorily have if you own a car. Without it, you wouldn’t be able to renew your road tax. You can find out more about car insurance here:
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4 Things to Know Before Getting Your First Credit Card
- By CompareHero.my
- July 5, 2021
Credit cards definitely do come with their own benefits and challenges, which can make it even more exciting for first-timers. Firstly, it’s a huge milestone to be able to get that card, and secondly, it’s a big adjustment. We don’t mean to scare anyone but credit cards do come with significant risks if it’s used irresponsibly. But if you can make sure that isn’t the case, it’s a fantastic yet efficient tool in your pocket!
Nonetheless, before going on this credit card journey, here are five things you need to know.
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1. A security deposit helps
A credit card is considered a type of loan that you can borrow from again and again as long as you establish a record of paying it back. A more technical term for this is an unsecured credit card, which means the loan made to you is not secured by any type of collateral.
A secured credit card, however, requires you to first put down a cash deposit. And your credit limit will typically be close to, or equal to your deposit. The idea of this is that because it’s your first time, they do not know what kind of person you are and not sure if you can pay the money back. By having a cash deposit, they’re going to feel much safer by giving you this card.
It’s a great way for students and fresh graduates to get a credit card to build their credits while enjoying some benefits of a credit card. As you use the card responsibly, you can request to reduce your cash deposit, increase your credit limit, or even convert entirely to an unsecured card.
2. Your first credit card can make or break your credit score
One of the main reasons to get a credit card in your 20s is to build your credit score, but if you’re not careful, it can have the opposite effect. The way it works is a report of your credit card activity will be sent to the authorities and they will compile it, which then forms the basis of your credit scores.
Here are a few ways to use your credit card responsibly and maintain a good credit score:
- Always pay your bill on time – Not only does a late payment hurt your credit score, but it can also lead to penalties or that you’ll have to bear some fees. Set a goal to pay your credit card bill on time every month. Set an alarm if you need to.
- Keep track of your monthly statements – First, go through the customer agreement before you start using the card. That statement will tell you when your due date is, fees, interest rates, and all the information regarding your card. Then, make sure to double-check your monthly statements before paying the bill.
- Stay below your credit limit – While you’re only required to pay the minimum requirement, it’s almost never a good idea to delay the payment and let the interest charges and credit card debt snowball.
Related: 6 Ways To Improve Your Credit Score
3. Check the rates and fees before applying
In Malaysia, the law requires credit card issuers to disclose certain terms, such as interest rates and fees before allowing you to sign the documents. Here is some important information that you ought to know:
- Annual fee – What it charges cardholders on a yearly basis.
- Annual percentage rates (APR) – This is the interest rate that you’ll pay on balances you carry from month to month. Bear in mind that there may be different charges according to types of balances such as purchases, balance transfers, or cash advances.
- Foreign transaction fees – Maybe not in the COVID-19 era, but hopefully, we’ll someday be using our cards in a foreign country. But before that, check the transaction fees.
- Late fees – Imagine this as the penalty for paying it late or not being able to pay the minimum required amount.
Another thing to note is that most of this information will only be disclosed after you apply or after your application is approved.
4. Provides more safety than a debit card
It can be quite intimidating as you make your first purchase using your new card, but it doesn’t have to be. In fact, it’s actually much safer compared to when you’re using a debit card, here are a few reasons why that’s the case:
- You pay with the credit card company’s money – When a crook gets access to your debit card information, they will have access to your entire bank account and can empty it if they want to. But for a credit card, if you have proof that you did not make the payment, you’ll have plenty of time and room to dispute it while keeping your savings safe.
- Easy to get a replacement – All it takes is one phone call to your issuer telling them about the fraud and you’ll be receiving a new one in a few days.
Ready to apply for a card?
Now that you know how a credit card works, have a look at the best credit cards in 2021 and see if that’s a good fit for you!
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Here’s How The CIMB e Credit Card Could Convince You To Go Fully Digital
- By CompareHero.my
- July 2, 2021
Let’s face it, at the rate of how advanced technology has become nowadays, everyone is slowly turning into a digital savvy person.
Not only that, but the recent pandemic has also left consumers with no choice but to familiarise themselves with the digital world. Physical meetings or events have had to be moved online, namely, e-meets, e-trainings and e-seminars. Additionally, the biggest change we could see throughout the pandemic is how physical purchases are mostly being done online.
And if you’re one of the few who’s currently hesitating as to whether you should really move forward with digitising your life, the CIMB e Credit Card will convince you otherwise.
Here are several reasons as to why you should go digital, with the help of the CIMB e Credit Card by your side at all times:
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1. Earn bonus points & exclusive deals for online shopping, food delivery, e-wallet, contactless spendings
It’s no surprise e-commerce and any form of online retail have been booming ever since the pandemic started. Not to mention the endless benefits of getting what you need online.
For instance, there’s no need for you to queue up at fitting rooms in order to get your favourite outfit. Online shopping allows you to return and exchange sizes if they don’t fit accordingly.
Not forgetting the fact that you won’t have to carry around a thick wallet full of cash, thanks to the existence of e-wallets and contactless payments. All you need is your handphone and a thin piece of credit card.
Earn up to 12x Bonus Points
If that isn’t enough to convince you, with the CIMB e Credit Card, all customers are able to earn 12x bonus points when you make purchases on the 10th of every month with featured partners including popular online marketplaces Lazada, Shopee and Taobao as well as other featured partners such as HappyFresh, foodpanda, Sephora, to name a few.
Save the hassle of queuing up at the cashier to pay for your groceries by ordering online from HappyFresh and earn the same amount of bonus points while you’re at it.
You wouldn’t need to struggle and find parking when you can order your food online while getting it delivered to you from food merchants including foodpanda, The Coffee Bean & Tea Leaf, and many more.
If none of the featured partners applies to you, no worries! The CIMB e Credit Card also rewards you with 10x bonus points on the 10th of every month for other transactions, with non-featured partners for your online shopping, e-wallet top-up and auto-billing payments. For every other day, you’ll earn 5x bonus points for all your online transactions as well, which includes food delivery and e-wallet reloads on Touch ‘n Go, GrabPay, Boost, BigPay and Setel. For in-store contactless purchases or other transactions, you could earn 1x bonus points too.
Exclusive Deals
On top of that, you could also get exclusive deals for all your spending made with featured partners. Here are the featured partners where you could get exclusive deals:
- F&B and Food Delivery: Domino’s, foodpanda, HappyFresh, The Coffee Bean & Tea Leaf
- Online Shopping: Go Shop, MR DIY, Shopee, Taobao, ZALORA, Lazada, OXWHITE
- Health & Beauty: Alpro Pharmacy, Sephora, The Body Shop
- Others: Coleman, Montbell
You could stay updated and check out the deals here.
And here’s another awesome perk. From now till 31 December 2021, enjoy 1-for-1 beverages of any size and any drink from The Coffee Bean & Tea Leaf on weekends with your CIMB e Credit Card. It can’t get any better than that, can it?
2. Never forget to pay your bills with the auto-billing feature
With many recurring bills to pay every month, you might just forget one or two. Save the time and make use of the auto-billing feature offered by the CIMB e Credit Card!
There’s no need to manually perform the online transactions to pay for your bills or over the counter anymore! The best part of it all? You’ll still receive 5x bonus points when you set recurring payments for your telco bills, online streaming services and utility bills. Imagine being rewarded simply by paying your bills with the CIMB e Credit Card and using the auto-billing feature.
Surely you’ll be convinced to move all your payments and go digital now!
3. Redeem various gifts with your CIMB Bonus Points
Now that you know by going digital, you’ll earn bonus points for all your digital spending, but you might wonder what’s the point of earning all these CIMB bonus points, right?
Having the best bank bonus points conversion value* in the market at 400 Bonus Points = RM1, you will be entitled to redeem over 400 products from the Member Rewards Catalogue at more than 5,000 Pay With Points merchant outlets in Malaysia. Plus, with a minimum of 22,000 Bonus Points, you can redeem e-vouchers worth RM50 from Shopee, Lazada, Grab, Touch ‘n Go, Zalora and lots more!
Some of the popular product categories include health & lifestyle, home essentials and travel.
Take a look at the complete Member Rewards Catalogue here.
4. Convert your CIMB Bonus Points to cash
Another great benefit of the CIMB e Credit Card is that you could easily pay your expenses with your accumulated CIMB Bonus Points, thanks to the CIMB Pay With Points feature. How?
Basically, your CIMB Bonus Points could be used as cash, with the same conversion value of 400 Bonus Points = RM1.
The participating merchants include popular stores such as Bata, Isetan, Jaya Grocer, Chili’s, Senheng, DOME, as well as other merchants from various categories such as groceries, dining, beauty & wellness, to name a few.
Browse through the full list of the participating CIMB Pay With Points merchants here.
Are you fully convinced to go digital now? If you are ready to digitise your lifestyle, go ahead and apply for the CIMB e Credit Card today.
*Best bonus points conversion of 400 Bonus Points = RM1 offered by CIMB is in comparison against other consumer banks in Malaysia published as of 1 June 2021. The conversion rate is applicable to Pay With Points participating merchants and cash back redemption.
Terms and Conditions apply. Check out more CIMB e Card benefits here.
