Part 1: Getting Ready For Your First Credit Card

Your credit card is the entry-level tool to building a credit record, which helps you with future loans or credit applications. Banks check your credit history before approving loans or new cards.

Imagine your credit card as a monthly spending report card.

• The billing cycle is usually 30 days (e.g. 1st to 30th).
• Every swipe gets recorded during this period.
• At the end, your bank sends a statement summarising your spend.
• You get a grace period of about 20 days to pay back in full.
• Pay fully and on time? No interest charged.

Let’s say your bill is RM1,000 and you only pay RM100. Now you owe RM900 and interest kicks in - compounding daily.

• Day 1: You owe RM900 → Bank charges interest on RM900
• Day 2: Interest is charged on RM900 + Day 1’s interest
• Day 3: It keeps growing – this is how debt snowballs.

Annual Fee

Some cards have no fee, some waive 1st year, some waive with minimum spend

Service Tax

RM25 yearly, automatically charged

Late Payment Penalty

Most banks will charge 1% of outstanding amount or minimum RM10 (capped at RM100)

Cash Advance Fee

Charged if you withdraw cash using your credit card

Your first credit card is like your first friend in the money world – stay responsible, and it will help you go far.

One last tip💡: Spend only what you already have in your bank account, then pay it in full before the due date. It’s all perks, no stress 😊