How to Make Money with Credit Cards
How to Make Money with Credit Cards.
Financially engineer to get the best out of your credit cards.
Let’s dive straight into the topic of discussion! A credit card (CC) is a must-have finance tool for working adults nowadays. It is no longer the symbol of wealth that it used to be. At the same time, just like any other tool, it could be a double-edged sword if not properly used; thus, be careful and wise with your CCs. Before we discuss how to engineer CC for maximum benefits; there are some very important rules to follow.
Rule 1 – Always pay off your outstanding balance EVERY month
Do not be so kind as to donate your hard-earned money to the banks as interest charges for late-payments and credit card balance charges. That’s the stupidest thing to do. If you can’t follow Rule 1, then stop, do not proceed further. Settle your current debts or reach out to us if you are currently struggling in debt.
You see, CC is a tool. If you use a tool correctly, you will then benefit from it. The same thing for CC, use it wisely, and you will reap the benefits later on. Still, if you foolishly burn it on an easy payment plan and spend beyond your means, you will get nothing but shiok sendiri sensation (owning a toy or going on a vacation you can’t afford) temporarily while spiralling deeper down into debt.
Rule 2 – Cheap is not always bad; Expensive is not always great. FREE is the best!
– a timeless quote from my Sifu Gen X
Always go for FREE FOR LIFE (Without any conditions) credit cards unless it is worth paying for them. You do not want to be spending your time checking whether you swiped X no. of times to fulfil the waiver criteria or calling the bank every year to ask for a fee waiver. Keep it simple and get a FREE for Life CC.
Rule 3 – Always read the terms and conditions of the benefits of the CC
As the saying goes, the devil is in the detail! Don’t be fooled and cheated by the bank’s promotions and marketing gimmicks without going down into the details of the terms and conditions of the benefits of the CC.
Defy any of the rules above; you shall perish at your consequences!
Now we have set the ground rules, let’s get into the hacking part. How to pick the right card for you? Most people will go for a cashback card that gives a certain percentage in cash backs. Often, there will be lots of TnC that you need to fulfil to qualify for the cashback.
We want to keep it simple and pick a few cards that give cash back for most transactions (optimisation-get more with less). Here is an example:
Card No. 1
Maybank 2 Card Gold/Platinum American Express (AMEX)
Note: Use only the AMEX card, you can keep aside the Visa or MasterCard as the benefits are not great.
For AMEX
- FREE FOR LIFE
- 5% Cash Back on weekends, including Petrol except for Government, eWallets and Utilities. Capped at RM50; means can spend up to RM1000/mth
- 5 X Treat Points (TP) on weekdays spending on ANY transactions (except transactions for Maybank 0% EzyPay Instalment Plan, at Education Institutions, Insurance Providers and Utilities (Electric, Gas, Sanitary and Water) will be awarded 1X TreatsPoint. For petrol transactions, 5X TreatsPoints is capped at RM500 per transaction and transactions above RM500 will be awarded 1X TreatsPoint for every RM1 spend.) (i.e., You spend RM50, you get 250 TP)
Card No. 2
Public Bank Quantum MasterCard and Visa – You will get 2 cards
PB Quantum MasterCard
- FREE FOR LIFE
- 5% Cash Back Every day for online transactions (excluding eWallets) capped at RM30; means spending up to RM 600/mth.
PB Quantum Visa
- FREE FOR LIFE
- 5% Cash Back on contactless transactions (except petrol and government) with a minimum of RM30 per transaction, capped at RM30 per monthly statement cycle; means spending up to RM 600/mth.
Card No. 3 – For Petrol
Maybank Islamic MasterCard Ikhwan Gold Card
- FREE FOR LIFE
- 5% rebate on petrol and groceries on Friday and Saturday, capped at a maximum of RM50 per customer per month.
Card No. 4 (Optional) – If you shop at AEON
AEON BIG Visa Gold
- FREE FOR LIFE
- 5% cashback on the AEON BiG Thank You Member Day, the 28th of every month.
- 5% cashback for petrol every Sunday, capped at RM15 per calendar month, means can spend up to RM300
- 5% cashback exclusively at AEON BiG Stores every day when you use VISA Paywave.
- 2% cashback for online and overseas spending every day, capped at RM15 per calendar month, which means can spend up to RM300
- Enjoy 3x Free Access to The Plaza Premium Lounge at Nationwide International Airports. (This is a really good deal!, FREE Food, FREE Beer, clean toilets)
How do you work things out?
The idea here is to convert and match your current expenses with the right credit card. Here is an example:
- Make a list of your monthly spending
- Use up the RM600 capacity with the PBB Quantum cards on weekdays
- On weekends use AMEX, if AMEX is not accepted use PBB
- Pour petrol for the week on Friday, Saturday (Ikhwan) and Sunday (Aeon).
Theoretically, per year you can earn:
PB Visa = RM360 for Paywave transactions
PB Master = RM360 for Online transactions
AMEX = RM600 for weekends transactions
Total = RM1320 in cashback
Let’s look at an example of monthly spending.
Monthly
| Item | Expenses | Amount (RM) | Card Cashback (RM) |
| Petrol | 300 | AEON | 15 |
| Petrol | 200 | AMEX | 10 |
| Shopping | 500 | AMEX | 25 |
| Shopping | 600 | PB Visa+Master | 30 |
| Dining | 300 | AMEX | 15 |
| Total | 95 |
Monthly Cashback = RM95
Yearly Cashback =RM 1140
Cost = RM 25 (SST)* 4 cards = RM100
Nett Cashback = RM1140 – RM100 = RM 1040
As you can see, RM1000++ per year is not going to make you any wealthier but it’s FREE money from living your daily lifestyle so why not. But remember, true wealth is built through investments that grow exponentially over time and not by collecting cash backs.
Takeaway
There is no one right card, but it will be great if you could get the best of everything in one or 2 cards that you are holding. Let’s say if you are a movie junkie, it’s good to have a card that gives you fantastic movie ticket deals like the Hong Leong GSC card. Anyways, whichever card you are holding, always remember the 3 Rules and pick cards according to your lifestyle needs.
I hope this guide is clear and helps you in optimising your cards.