Entry-Level Credit Cards in Malaysia

Young adults who have just entered the workforce are typically new to credit cards, as one needs to have earned a salary for 3 to 6 months before being eligible for a credit card. Most young working adults start with a modest salary, and credit card issuing banks usually design entry-level credit cards for this group. These cards are mainly intended for payment use, to help cardholders build up their credit score, and to provide banks with more data points to assess the credit risk of the cardholders and determine the appropriate credit limit for them.

As a result, the entry-level credit card market is an area where every issuing bank aims to secure a significant share. One of the reasons is that these young working adults will likely upgrade their cards to higher tiers in the future. In this article, we explore the current entry-level credit card landscape in Malaysia and how these credit cards reward cardholders.

Qualifications: Annual Income

For entry-level credit cards, the annual income qualifications are slightly above the national minimum wage of RM1,500 per month. Using DuitHub's credit card explorer, we filtered credit cards with annual income requirements of less than RM30,000 (or RM2,500 per month) and found 79 credit cards. At the top of the list are some popular credit cards featured in our other articles, such as the RHB Shell Visa credit card, Alliance Bank Visa Platinum credit card, UOB One credit card, Hong Leong Wise Gold credit card, CIMB Petronas Visa Platinum credit card, CIMB Travel Platinum credit card, and many others. Most of these cards only require an annual income of RM24,000 and are great for cashback rewards.

However, not all of them are free from annual fees. The UOB One credit card, CIMB Petronas Visa Platinum credit card, and CIMB Travel Platinum credit card are great options without annual fees. You can get annual fee waivers for most of the cards. For example, cardholders can swipe 24 times per year to get a fee waiver for the RHB Shell Visa credit card. Some other cards offer a fee waiver for the first year. For the Hong Leong Wise Gold credit card, the annual fee is RM98 and is not waivable, but cardholders benefit from decent cashbacks.

Cashbacks vs. Rewards

For entry-level credit cards, the focus of rewards is on cashbacks, as young working adults may not have high spending power to earn significant air miles that can actually be redeemed for air tickets. Getting cashbacks with minimal spending is the main selling point of these entry-level credit cards. The RHB Shell Visa credit card rewards 12% cashback for petrol and 5% for other categories if monthly spending exceeds RM2,500, with monthly total cashbacks of RM100+. The UOB One credit card offers 10% cashbacks in multiple spending categories, with monthly cashbacks of RM60+. Another petrol co-branded card, the CIMB Petronas Visa Platinum credit card, rewards 8% cashback on petrol and 2% cashback if monthly spending exceeds RM2,000, also offering monthly total cashbacks of RM100+. Finally, the Hong Leong Wise Gold credit card rewards 8% cashback in many categories, targeting RM60+ cashback per month.

If air miles are your focus, the Alliance Bank Visa Platinum credit card gives 1.33 miles per Ringgit spent on local spending (online and e-wallet), and the CIMB Travel Platinum credit card gives 0.62 miles per Ringgit from overseas spending. Note that the miles per Ringgit rates here are based on conversion to Air Asia Big Miles, where each mile point is worth around 1 cent in Ringgit. In the case of the CIMB Travel Platinum credit card, spending RM1,000 per month would get you 1,330 miles per month, and if we consider the value of RM13.30, this is equivalent to 1.33% cashback. (Note that Alliance Bank limits the online and e-wallet spending rewards to a cap of RM3,000 per month, which amounts to about RM40 per month in rewards, not far from the cashback credit cards.)

Other Benefits

Aside from cashbacks or rewards, there are other benefits that entry-level credit cardholders can consider. The CIMB Travel Platinum credit card offers 4 times access to Plaza Premium lounges per year. If we slightly increase the monthly income requirement to RM30,000, the AEON Visa Gold credit card offers 3 times access to Plaza Premium lounges per year, making it one of the rare entry-level cards that offer airport lounge access.

Another benefit associated with travel is travel insurance. The CIMB Petronas Visa Platinum and CIMB Travel Platinum credit cards offer up to 1 million Ringgit in travel insurance, while the AEON Visa Gold credit card provides travel insurance with a sum insured up to RM200,000.

Summary

We hope this clarifies why having an entry-level credit card can benefit and reward you in your daily spending. There are many factors to consider when deciding which entry-level credit card is most suitable for you, and the key is to spend wisely without accumulating debt from unnecessary spending. The examples provided above are just some highlights from the lineup of credit cards that can be considered as entry-level options. Readers can utilize DuitHub's credit card explorer to find more entry-level cards that offer rewards in different categories and fit their spending habits.