Cashback Credit Cards

Credit cards are the Achilles' heel of many. Like loan sharks, banks lure in prey with easy credit and enticing offers. I roll my eyes whenever I see platinum cards being approved to people earning a lot less than RM5000. Foolish young ones rack up debt which banks delighfully charge the exorbitant interest rates on.

The banks are putting ideas in heads that having credit is the same as having cash. It is not. But consider the alternative; debit cards, they have hardly the same benefits as normal credit cards and are not acceptable everywhere. Credit cards still hold the edge.

I’ve had it with banks and their credit card traps. I wish I could exploit them instead. So it heartens me that in recent years a new category of credit cards has emerged: the Cashback credit card.

Follow my lead ONLY if you can:

1. Control yourself and your spending with purse strings tighter than a monkey's nuts.
2. Calculate your expenses on a daily basis (or before and after every time you make a purchase)  
3. Pay all your bills in full and still save money month after month, for a rainy day of course

There are quite a number of cashback credit cards in the market, many trying to outcompete each other. But all, sadly, trying to make you spend more than you should and hoping you don’t pay your bills on time.

So, generally the best cashback credit cards are ones that:

1.  Don’t have many conditions e.g. minimum spent before cashback kicks in
2. Are the least complicated and sneaky which deliberately makes you spend more
3. Offer continuous cash back unconditionally, avoid those short promotional term ones
4. Cover a broad range of products and not just petrol or groceries
5.  Should have easy waiving of annual fee (and also govt. tax)

New cash back credit cards get issued every now and then. This is a good guide to get started.

For myself, I have chosen not one but three cashback credit cards each with its own scope of use. Sounds a bit much? I assure you that I have done the math (including yearly govt. tax of RM50) and factoring my current credit card usage (I’m not a heavy roller) it is sustainable.

Maybankard 2 Gold Card

• Annual fee: Lifetime fee waiver
• Minimum annual income:RM30,000
• The benefits of two cards, Maybankard 2 American Express® Card and Maybankard 2 MasterCard, in one sign up, one service tax, and one statement.
• 5x TreatsPoints for all spend on your Maybankard 2 American Express Card in Malaysia or anywhere else in the world except Government Bodies, Education Institutions and Insurance Provider.
• 2x TreatsPoints for every RM1 spend on your Maybankard 2 American Express Card at Government Bodies, Education Institutions and Insurance Providers. 1x TreatsPoints for all spend on your Maybankard 2 MasterCard/Visa Card.
• 5% Weekend cash back when spend on Maybankard 2 American Express Card.
• A cap of RM50 per customer (Principal Cardmember) per month

Comment:

The American Express card is the one with all the benefits although you get an extra credit card. As long as it is accepted, at 5x points, you get 10000 points for every RM2000. Based on Maybank’s redeemable vouchers, 10000 points can get you approximately RM50. The RM50 govt. tax can be waived with 10000 points as well. Best of all Maybank’s treatspoints never expire. That is approximate additional 2.5% cash back with a total of 7.5%. Drawbacks: Weekend Amex use only.

OCBC Titanium

• 5% Rebate on Dining
• 1% Rebate on everything else
• 5% Rebate on Groceries
• Zero Annual Fee with 12x swipes
• 5% Rebate on Petrol
• 33% Cash Back on Interest Paid
• 5% Rebate on Utility Bills
• Annual Usage Bonus – Govt. Tax offset with RM10k annual usage

Comment:

Best all-around card best used as a primary card unless they accept AMEX. Also best to be used for all bills that include Astro, telecoms and electricity bills. So if you’re paying bills like most of us, switch to this credit card instead. Only 12 swipes a year regardless of amount to offset annual fee.

RHB Evo

• 20% Cash Back* on selected Amusement & Entertainment MCC categories (ie. cinemas, ticketing agencies, bowling alleys, commercial sports, tourist attractions, amusement parks, karaoke centers and much more)
• 2x Reward Points for all E-commerce transaction and RHB Now bill payment
• Card annual fee waived with minimum of 12 swipes per annum
• Maximum cash back is RM50 per month, per customer. No RHB Reward Points awarded for transactions entitled for Cash Back.

Comment:

No kidding, it really is 20% for any establishment that matches their merchant code category. It works for me as I watch quite a lot of movies and go for the occasional karaoke. For that rebate to be maximized fully, your expenditure can’t exceed RM250 a month.

I know what you may be thinking. Three cards, so many, when to use what. It’s not easy, I won’t lie. But saving money isn’t easy. So I've made a flowchart to help decide which card to use and when. I’m gracious enough to share it with you so thank me.