If you are a long time die hard follower of mine, you will know that I have reiterated over and over again that Credit Cards are liabilities.
Credit Card will entice you to spend more! This is a FACT. So we must have discipline when it comes to spending money and do not for once think that credit cards are here to solve your financial issues. Credit Cards are designed to make the banks richer and the cardholder poorer.
Besides the above where we may end up spending more money on non-essential stuff, another major disadvantage of owning a credit card is that it may be used fraudulently and may give us a freaking huge headache.
Two months ago my Maybank AMEX had several fraudulent transactions, luckily I read the Notifications in one my phones (everyday I receive more than 50 notifications and I don’t read them daily) while I was overseas, so I had to call CS and paid the overseas charges instead of Toll Free Line in Malaysia. Then last month right after I returned to KL from Europe, my UOB credit card that I have not been using for months had several fraudulent transactions (which UOB sent SMSes which I do read as there are not many SMSes daily). Then this week, I woke up and saw that there was a fraudulent transaction with my AMEX Plat-i!!! In all 3 cases mentioned in this paragraph, new cards were issued to me after I reported the fraudulent transactions.
In respect to the above said paragraphs, Credit Cards are liabilities!!!
Do Not Activate Your Debit Cards For Transactions
Before I proceed to write more on Credit Cards’ Credit Limit, let me tell you, using a Debit Card for transactions is even worst!!! If you are a long time follower of mine, you would have deactivated your Bank’s Debit Cards to be used for any kind of transactions (which includes topping up eWallets) and only used it for withdrawing cash from ATMs in times of emergencies.
Nowadays all of us have debit cards with Visa or MasterCard logo in addition to credit cards. These said cards are actually very dangerous compared to the previous ATM cards because with the Visa and MasterCard, the Debit Cards can be used for online transactions!
Therefore it is imperative that you do not use your Debit Cards, especially with online merchants, so that the card details will not be recorded anywhere except in the bank’s system that issued the card.
There is a big difference between Debit Card versus Credit Card.
With Debit Card, the moment there is a transaction, the money will have been deducted from your account, i.e. GONE!
However, for credit card, we can dispute an unauthorized transaction and we do not need to pay a sen while the card issuer investigate.
Having said the above, please note that UOB uses their Debit Card as a another security verifications where you need the card in addition to your NRIC when you perform certain transactions at their counters (e.g. purchasing/selling gold, cash withdrawals and etc) but all the same instruct that the Debit Card CANNOT be used for transactions, i.e. deactivate the MasterCard features. Only fools will complain that they need UOB Debit Card for transactions at UOB or even Mobile Banking when in actual fact it is another layer of security to protect their customers.
You have been warned, and if you did not deactivate your Debit Card for transactions and someone go use your Debit Card numbers and your money disappeared, you only have your self to be blamed for being stubborn and equally stupid.
High Credit Limit Is A Liability
As for Credit Card, we are assigned a Credit Limit.
Some people complain that their Credit Limit is too low but in actual fact the Card Issuers have to comply to Bank Negara MAlaysia Guidelines taking into consideration of their liabilities which include whatever loans and other Credit Cards’ Credit Limits!
Therefore, it is very common nowadays that a credit card issuer may reject your application for a new credit card. Only a fool who has existing credit cards (can be RM200K Credit Limit) will complain this and that bank is lousy when their application is rejected when in fact it is to protect them.
Basically, Bank Negara Malaysia guideline on a new credit card application is to protect a person from ending up in the bottomless shit hole of debt. So if you have a “low” credit limit, it means most probably your liabilities are high or you have no credit history.
As for those who have high Credit Limit, it is not a good thing if you do not need it because you will have a huge headache if your credit card was used fraudulent and you failed to report immediately (that is why I mentioned Maybank Notifications are useless as we get hundreds of notifications per day from our Apps – then again, Maybank SMS number have been compromised where fake SMS are sent to us, for example our TP are expiring and to contact Maybank via a fake link in the SMS).
If you have a Cash Back Credit Card where there is a cap on the spending to earn cash back, why the heck you need a Credit Limit that is 10X more than the spending cap. For example, we can only earn max RM100 per month with the Maybank Ikhwan Platinum-i, why the heck do you need RM10K Credit Limit when maximum RM3K should be adequate before you settle in full the Statement Balance (of max RM1,250 to earn RM100 in cash back)?
Having said the above, if you have say Maybank 2 Cards Platinum AMEX which earns you max RM50 cash back per month with RM1K spending but you also have a Maybank AMEX KrisFlyer AMEX Platinum where the Credit Limit are Combined, then it makes since to have more than RM5K Credit Limit or up to the amount you can sleep soundly in the event Maybank says you are responsible for the fraudulence transactions!
Before I forget, Maybank AMEX and Premier Cards Customer Service Toll Free Line is the best as they can be contacted 24/7.However, other banks like Alliance, HLB and etc, their CS only work for a certain hours daily and some do not even work on Sunday! Worst are non-Premier Credit Cards’ CS where we may be on hold like forever before we speak to a human and nowadays with AI, we may not even get to speak to a human.
So for Cash Back Credit Cards, it is damn stupid to have high credit limit as most of them have a monthly spending cap! I recommend that you reduce your Credit Limit for Cash Back Credit Cards to max 2X the monthly spending cap for that card. However, like I mentioned above, if your Credit Limit is combined with another credit card that gives you Reward Points, then it may not be practical to reduce the credit limit from that particular card issuer.
As for Credit Cards that rewards you with Air Mile, you need the right card based on your spending pattern.
For example, you guys should know by now that the HLB Visa Infinite is freaking good for dining. However if you only spend less than rM5K per month on dining and insurance, why the heck do you need a Credit Limit of RM50K with the HLB VI?
Click here to read my article on Hong Leong Bank FREE FOR LIFE Visa Infinite
Now, if you had read carefully, I mentioned Dining and Insurance for the HLB VI. You see, you can earn more air miles with other credit cards. For example, the Maybank KrisFlyer AMEX Platinum earns you more air miles compared to HLB at place where AMEX is welcomed including Airlines, Departmental Stores, Luxury Brands, Movies, Petrol, Supermarkets, Speed 99 and etc.
HOWEVER. where AMEX is not welcomed, the HLB may be very good. One may say he/she needs a high credit limit with the HLB VI in case of emergency (because you do not have a Medical Card but most private hospitals accept AMEX), paying for Tours with agents that does not accept AMEX and etc; then it makes sense to have a high credit limit.
The HLB VI is FREE FORE LIFE so it is a good card to have.
But whatever it is, only have Credit Limit that you can sleep in the event the card was used fraudulently. Now if you have more than net positive RM2M (either in properties, EPF, Savings, Stocks and etc) and you worry about losing RM100K then you have a issue where you are controlled by money and eventually will be punished by God where you will have a miserable life and the moment you die someone will get to enjoy your hard earned money, hahaha.
Then we have Alliance, HSBC, RHB, and PBB Rward Points Credit Cards and even Maybank 2 Cards PRemier for Local Spending which are now useless since they revised their cards’ features. IF you are holding a credit card that earns you Reward Points, ask yourself – can you sleep if that card was to be maxed out by someone else? IF the answer is NO, you should reduced the Credit Limit or event terminate the card!
Since this article is about security, you should click here and read my article titled Where and Why You Should Use Virtual One Time Use Credit Card
CONCLUSION
You do not need a High Credit Limit for Cash Back Credit Cards that have montly cap on spending.
If you cannot sleep soundly in the event the card issuer says you are responsible for the fraudulent transactions, reduce your Credit Card Limit to an amount you are not bothered with the damage to your pocket.
If a credit card is not benefiting you, you should terminate the card UNLESS it is a FREE FOR LIFE card then you should keep it BUT reduce the Credit Limit to say RM20K or RM30K so that you can control the damage to your pocket.
Once again, Credit Cards’ Credit Limits are liabilities, so make sure you are able to handle the liabilities and no one is to be blamed except yourself as you have full control to reduced the Credit Limit or even terminate the credit card that are useless to you.
GenX GenY GenZ 
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