There are many advantages using credit card wherever whenever we can because:
1. our expenses are properly recorded
2. the credit card statement can be used as proof of payment when filing for income tax
3. get rebate on our expenses
4. emergecies : hospitalization, lack of cash when traveling overseas.
The best advantage is that it increase our cash in hand. Why do I say so?
Let’s say your fix expenses is RM5000 per month. You use your credit card to pay for all those fix expenses monthly. The due date to pay back your credit charges is 20 days after the statement date. Therefore, we can have the RM5000 put into our own saving account to earn interest for 50 days. Even better if you put the money in your homeloan-link account to reduce the interest charges! This means we actually have extra RM5000 in the bank!
Credit card really helps! (Only if you know how to use it)
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How to handle credit card debts?
I have about cc debts of 20k form 3 banks. I also have 22k of HARD EARNED savings in my current account. Would you recommend me to pay off the cc debts now??
I find it difficult to part with this 22k which I saved for the last 1 year!!!
The interest charged on your cc debts is very much higher than your interest earned from your FD or Savings a/c. So the debts in your cc will accumulate faster. It is better to settle the debts and then, start savings a/c and this time, make sure you do not accumulate debts in your cc again.
better pay off your debts. Within 1 year you can earn the money back
There must be a reason you are not paying off the cc debt with cash in saving account. To balance the whole thing, you have many other options.
Dear KClau,
I can’t understand why we can extra RM5000 in bank account.
What I mean is that it is “like” having extra (not actually having) money. Some sort of we owe the bank first .. pay later without interest
Hello KC,
I think the rule of the thumb, is to settle credit cards debts as we are know the interest rate is very high! Verse the FD acct.
Your statement : The due date to pay back your credit charges is 20 days after the statement date. Therefore, we can have the RM5000 put into our own saving account to earn interest for 50 days. (KC pls elaborate how come for 50 days when due date is only 20 days!!!)
Your reply to one of the query: What I mean is that it is “like” having extra (not actually having) money. Some sort of we owe the bank first .. pay later without interest!!! (KC is this possible, very doubtful ya!!)
Hope your support of the credit card usages/benefits will not lead people who does not know how to managed finance well but ending more debts.
I thought your advice is always the wise & fruitful typed!
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I just did some research on land price via iProperty.com
When come to land price….. it is so subjective and negotiation power and skill are vital.
Well, it is easy to plan but when comes on practically, most of us failed and your debt will slowly accumulating…..thus not all can adopt this so call using bank’s money…..just my 2 cents…..
Money skill, not taught in school.
I totally agree with you. Many people things it’s better to save money in bank than pay the cc debts, actually it’s the other way round. I just took RM10K loan from cc with lower interest and shorter repayment period to pay off my other debts in other cc. Once this is done I’ll pay off this loan ASAP eventhough i need to pay a small amt of penalty charges for early settlement.
Credit cards are silent killers if you do not know how to handle them. Better to stay away. I had just been approved a 40k limit card by hsbc, i am planning to cut it up. Life is miserable having to pay debts every month. As bad as owing the AH LONGs.
Credit card is most useful when it’s emergency. If the self-control
is good, there is no harm keeping credit cards.
Back to basic fundamental – Self discipline.
Without SD, even you earn 5 figures per month will be in debt for 5 figure or more.
With SD, credit card is a tool to earn more for you.
So, cultivate self-discipline and master money skill from today.
How? Read more books, blogs and think more.
Happy new year 2011.
Dear KC Lau,
So far I have never used any credit cards because for me I dont think that people out there should use credit card and for me it is betetr if you use cash. I like to use cash instead of card because if you have cash so you will only use the amount that you have in your wallet to spent.
Ofcourse from previous post that i had read you give us a lot of ways and guides in order for us to be able to settle our credit card debts, thank to you and i hope all that will benefit all of us.
For me, credit card is not a MUST for me because I want to control my expenditure. This is because when you start to use credit card, you will start lost control on your expenditure and together with your budget.
Even though in emergency, tyr not to have the credit card and try to spare some cash in your second bank account and make it as the emergency account. This is because we know that for the first time our credit card we said that it only will be use for emergency but if you are often make emergency as your excuse, so I think this will give effect on your payment later.
Bottom line, try not to use credit card if it is POSSIBLE. You can save more!!!
Dear Eidil,
There are in fact a lot of people like you too.
That makes a lot of sense. Without having the card, you won’t be facing any trouble using it.
Thanks a lot for commenting here.
Good day,
Dear KC,
Do you have any ideas or suggestions if let say i want to make my income from RM1500 to RM5000 per month? Becaus right now, after deduct al my expenses i only got balance another RM300 for my saving which is I feel is not enough for my saving. I am planning to save more and if can, I want to save RM1k for each month but the thing is, i do not know how can i gain such a abig amount of salary. That is why i keep on changing working place to aim for better salary . So far i already full up my ASB using the ASB loan with RM200k, buying gold and maybe i am planning to open a small food stall as part time after working hour. My target is that after, seems that now i am only 24, i am planning to have an income of atleast RM60k per annum which is RM5k per month. So, if you have any ideas, advices and suggestions that might help me achieved my target please to let me know.
Hi Eidil,
There are many different ways to make more money. Some people focus on their job and by giving high performance, they are promoted faster with bigger salary increase. Some people work on part time work or business and when their side income is the same as their current job, they resign and work on that instead.
It also comes down to what you are interested to do. If you know you’ll be having fun with the food stall thing, maybe you should take it seriously and who knows you will own dozens of stalls found everywhere.
Wish you the best of luck!
Hi KC,
Thanks for the advice!! Maybe i will do a part time job by set up my small food stall near my house for now. Hope that my first business will sustain and grow bigger in the future
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