This article was written with the intention to show those who are new to credit cards the benefits of using credit cards and also not to fall into traps set by the banks with 0% loans and easy credit.

I was surfing the internet and came across an article titled Couple balances 15 credit cards with no debt—it’s helped them save nearly $500,000, but expert warns the strategy ‘isn’t for everyone’ – click here to read it.

Well, at one stage I think I also had more than 15 credit cards, haha. Today I only uses cards from 5 banks which make up to a total of `15 cards too!!! Some of my disciples have more credit cards than me especially if they are into cash back too.

Now, if you had read the link at the first paragraph, you will note that the most important thing is never to have any outstanding balances where you pay interest to the bank(s). This is super important because the moment you start to enter the shit hole of debt, it is the beginning of you spiraling down into the bottomless shit hole of debt and it is very hard to get out of it.

The only 2 debts which may be necessary during your wealth accumulation mode before you attained the level of Chiak Bui Liow – are Housing and Car loans. I said may be necessary….. if you stay with your parents and you do not stupidly burn your hard earn money then you will reach the level of Chiak Bui Liow sooner.

Talking about housing loan, today we have so called Flexi-Home Loan where you can deposit money into a particular account to offset the interest from your housing loan. Most people don’t realise that they are still paying interest and more importantly this is a product by the banks to trap people into being in debts longer! You see, this type of so called Flexi-Home loan gives you the false impression that you have money, i.e. they tell you that you can withdraw the money in this said particular account anytime you want, but in actual fact what these people are paying the housing loan interest and not shortening the loan period to pay less in interest and be debt free asap. The smart people will pay of their housing loan ASAP to pay less interest and be free from debt and the property free from encumbrance and the title of the property is solely in their name and nobody else!

Click here to read my article titled Life – The Goal Is To Be Debt Free

The other traps by the banks are 0% Balance Transfer and 0% Installment Plans. You think the banks are so generous to give you 0% loan? The banks know these people who utilizes these kind of products are short of cash and the probability of them failing to pay the agreed installments on time is high and eventually these people will be penalized and pay interest! Only people who have money issues will tell you to go into debt by utilizing 0% Balance Transfer and 0% Installment Plans! If anyone tells you that these 0% loans are good, it means that person has money issues or attached to money (which is the root cause of most emotional issues which leads to stress and ultimately affect ones’ health) so do not listen to that person!

Yes, I admit previously I did promote 0% Balance Transfer Plans but after utilizing it, I realized it gave me the false impression I had more money than I have because the amount to be repay back for the 0% loan is being parked at my Savings Account that makes me think as if I have money to spend! Therefore, nowadays I no longer promote 0% Balance Transfer or 0% Installment Plans.

Another thing, if you are using a Maybank credit card for 0% Installment Plan, you may only earn 1XTP unless there is a promo. Take note.

Click here to read my article 0% Installment Plan Is A Trap By The Banks

Before I proceed to show you the benefits of owning credit cards (in Pages 2 to 5), I will first tell you NOT TO TRANSACT WITH A DEBIT CARD that is linked to your Savings Account which may have ten of thousands of Ringgit.

I am sure most of you have more than 1 Visa/MasterCard Debit card linked to your CASA (Current Account Savings Account). My advice to you is that you should (1) deactivate all your debit cards linked to bank accounts for transactions (online or over the counter), i.e. making the Visa/MasterCard useless for transactions but still good for ATMs withdrawals and (2) do not activate the debit card(s) if you are not using it!

For example, I have 5 debit cards from 5 different banks but I only activated 2 of them, which means the 3 non-activated debit cards are useless. The 2 Debit Cards I activated – one debit card is for the purpose of emergency withdrawals from ATMs and the other debit card is from UOB which I need it to perform transactions at UOB over the counter but the card is useless for transactions with merchants.

You see, if there was to be an unauthorized use of your Debit Card, the amount is immediately deducted from your CASA and you may have headaches.

On the other hand, when an unauthorized transaction occurs with your credit card, you can dispute it (some bank like Maybank Premier Credit Cards are almost hassle free where the unauthorized amount will be debited/void but some banks will insist that you are responsible for the unauthorized transactions!); but because you did not pay the disputed amount there is no damage yet and have time to resolve the issue.

In respect to the above paragraph, credit card’s Credit Limit is a liability too! There is no point having high Credit Limit if you do not need it! For example, your monthly usage is RM10K per month where you settle in full monthly so that you are not stupidly paying interest – why the heck do you need RM100K Credit Limit?

Some of you may argue that you need higher credit limit than your current Credit Limit (e.g. you need to buy a Gold Rolex Watch or a new car). Well, if you only need a higher credit limit once in a blue moon, click here to read my article title How To Pay For A Transaction Higher Than Your Credit Card’s Credit Limit

On the other hand, if you say you need a high credit limit for Private Hospital Admission – then I will say it depends if you have the money to repay the transacted amount. If you are willing to face the hassle when your credit card was used fraudulently then fine (once again above link shows you how you can pay for a transaction higher than your Credit Limit) BUT if the transacted amount will give you financial stress then you better go to government hospital!

However, sometimes there are safety reasons as to why we prefer not to use a credit card or maybe you are not able to qualify for a credit card. This is where Prepaid Cards from eWallets are good. Firstly we can transfer money to the eWallet for FREE using Duit Now and then use the Prepaid Cards. Secondly we can control the damage in the event of fraudulent transactions as we can control the deposit with Duit Now. Thirdly, you can pass the Prepaid Card to your parents or children which will come in very convenient when using Public Transport in Singapore or Sydney and even going to toilet in Europe! Examples of Prepaid Cards – AirAsia Big Pay Visa Card, TnG Visa Card and Enrich Money Visa Card.

With the above, I shall now tell you the benefits of owning credit cards, please click on the button below to Page 2.