Wednesday, December 30, 2009

Credit Cards Snip! (I)

Ah... finally with some time in my hands as I stayed off work, and found the "will" to call up the credit card companies to "snip" all the credit cards to avoid having to pay the RM50 credit card tax and RM25 for supplementary cards. All my hopes of the Government reversing the new tax has completely vanished.

But first, I have to decide which card(s) to keep and frankly, the decision was relatively easy.

Please proceed to read this post only if you are a little bit of a shopper, or you are keen on the inanity of various credit card benefits, value of reward points and customer service quality. Or if you want to have a peek into how my silly little twisted brain works ;-)

Here's what I did. I decided to keep 2 cards only.

1. Citibank "Shell" Visa credit card

This card offers the best deal in terms of cash rebates, which is better than card reward points. You get 2.5% cashback for Shell fuel purchases, and 0.75% cashback for all other purchases.

Many credit cards offer "up to" 2% cashback (Alliance, OCBC etc.) but read the fine print. You'll only enjoy 2% cash back for monthly purchases in excess of say RM6,000. Otherwise, for expenditure below that, you'll only get cashback of not more than 0.5% Either that or, you'll only enjoy the higher cash rebate if you have carry forward balances - which then doesn't make sense as you'll be paying through the roof in terms of interest. Or you'd only receive the high cash back percentage on certain days of the week.

The 0.75% rebate is also better than all reward points because reward points are worth at best only about 0.55 sen per point. For example, to get a RM50 voucher from Robinson's, it'll cost you 10,200 points from Citibank. This translates to 0.49 sen per point only. If you get a Giant voucher, that's 12,000 points, and each point will be worth only 0.42 sen. And you will still have to go through the trouble of converting your points. Hence getting 0.75 sen back per ringgit you spend is the best offer on the table today.

(Alternative card for those who don't pump petrol or don't use Shell: The Citibank "Giant" card, same deal as Shell (but capped at RM600 per year), except instead of getting 2.5% back at Shell, you get it from Giant)


2. Maybank American Express credit card

This will be the default card I would use if the merchants accept Amex cards. This is because I will get a standard mininum of 2x reward points for every Ringgit spent. At some stores, you can get up to 5x or 10x reward points.

Say if each point is worth 0.5 sen, then I'm effectively getting back 1 sen or 1% back per Ringgit spent, higher than even the Citibank "Shell" card cashback.

And surprisingly, Maybank rewards are the most "value for points" in the sense that you will require the least amount of points to convert to a particular reward. Let's give an example:

For Carrefour RM100 voucher, you require only 20,000 Maybank reward points. However, the equivalent for Citibank will be 24,000 points for a Giant RM100 voucher. For HSBC, it's 22,000 points for a Giant RM100 voucher, and 24,000 points for a Carrefour voucher. For Alliance Bank, it's even worse, it takes 26,000 points for RM100 Giant voucher. Only for CIMB, it's slightly lower at 19,800 points for a Giant voucher. I can go on with other banks, but you get the idea.

For a RM100 Haagen Daaz voucher - it's 18,000 points for Maybank, 20,000 for HSBC, 16,000 for CIMB, 28,800 for Alliance.

For a RM100 Borders/MPH voucher - it's 18,000 points for Maybank, 22,000 for Citibank, 26,000 for Alliance Bank, 19,000 for CIMB and 20,000 points for HSBC.

The "value for points" applies to practically all other products. But I wouldn't suggest you to convert points to products because, they are typically all "expensive". Simplest option is to convert to vouchers, and you can use those vouchers to purchase the products which are regularly on special offer.

For the past year, Maybank also had a special offer where at the 1Utama Maybank Card Centre, you can exchange for RM50 Caltex/Petronas fuel voucher for only 8,500 points, or more recently, RM50 Parkson's voucher for 8,000 points only(!) There's really no better deal for reward points with any bank than these. Hopefully there's more such offers next year.

What's more, recently Maybank Amex did a promotion where you get 15% cashback (capped at RM150 per card per month) for every transaction you do at designated shopping centres such as 1Utama, MidValley and Tropicana City. This offer ends in February 2010. However, do read the fine print as Maybank will only pay out a maximum of RM4 million over these period starting November. Which means that in all likelihood, purchases in February will not enjoy the offer any more as surely consumers using Amex would have spent more than RM26.7 million by then to enjoy the RM4 million cash back.

I must say I was a little "card swiping trigger happy" in December as I bought a new pair of shoes on 30% discount, and will get another 15% cash back from Amex, and a few other such items. ;-)

Hence for Maybank Amex card, not only you get at least double reward points per transaction, you'll get the best "value for points" when you choose to redeem them. Unfortunately, not all merchants accept Amex, and hence my Citibank "Shell" Card will serve as my trusty back up whenever Amex is not accepted.

Here's Tony "thrifty shopoholic" Pua signing off for now. I hope you enjoyed the above, my missus thinks I'm insufferable. I'll blog on my lousy experience getting the remaining many cards terminated next. ;-)

12 comments:

CK said...

Great analysis!

Yeah, terminating cards in this month is a real pain. HLB and Alliance seems "unreachable", OCBC is prompt though.

Shanmuga K said...

What happens if a merchant only accepts Master Card?

nckeat88 said...

Citibank Shell Card may not be good as it seems because they charge annual fee and all your rebate may well go to the annual fee. Some card like direct access / CIMB do offer free for life and they give 2% rebate on petrol EVERYDAY plus 5% on 1st weekend of the month.

nckeat88 said...

The Citibank Shell card charge annual fee RM90 for classic card (you need to pump RM6000 just to offset the annual fee) or RM195 (Rm3900 with 5% rebate just to offset the annual fee) for Goldcard and you only got rebate on Shell fuel. CIMB/Direct Access cards are FREE for life and they give rebate 2.5% to 5% on petrol from ANY brand of fuel. I have the Direct access card for last 20 years without paying a single sen on annual fee even if I don't swipe the card in a whole year. The petrol rebate is yours and no need to be used to offset annual fee.

Unknown said...

K Shanmuga,

I've not seen any merchants only accepting Mastercard without VISA or vice versa. Banks offer merchants both at one go. I only know "The Ship" restaurant boycotting one of the cards before.

NCKeat,

The annual fee RM90 is easy. Just a phone call and it gets waived. Used to have to do a lot of those. But now with only 2 cards, it's easy.

1. Comparison with CIMB card (Petronas) v Citibank (Shell):

Shell - 2.5% rebate; Petronas - 2% only
Shell - 0.75% cash rebate on ALL other transactions, Petronas - only 0.5%.
The 5% 1st day of the month (only) rebate for Petronas is impractical, but regardless, the offer expired in March 2009.

2. Comparison with Direct Access (any petrol) v Citibank (Shell):

Read the T&C of Direct Access, and it's self-explanatory that the Shell card offers a better deal:

"From 1st July of 2009 to 31st December, Direct Access World, Platinum or Gold Master Card offers a 5% rebate at any petrol station on the 1st of every month and 2% rebate on all other days - The rebate is capped at a maximum spending of RM200 or rebate of RM10 on every 1st day of the month.
"

Hence unlimited 2.5% rebate from Shell, anytime, anyday of the year is a much better deal. Anyway, the petrol rebate offer expires tomorrow for DirectAccess card.

Tony ;-)

russel said...

That the exact results that I find out after going through every single banks' cards fine prints and T&Cs...

Ultimately, like yours, it is either Shell Citibank or Maybank Amex...

There used to be a Standard Chartered Titanium card which gives you unlimited 2.5% rebate off any transaction and 5% rebate off during Friday only...no catch at all. Imagine paying off all the bills on Friday and get 5% off ;)

I guess thats why StanChart decides to pull off this card from the market...losing money maybe...

Anonymous said...

Woh..interesting topic..!
Learning a lot indeed from YB in life..!

No wonder I am so poor..even working 12 hours or more every day..but still being so poor in life..for bankers..!

Keep on your life-minds games..improving all the lives of others..in Malaysia!

When I rich enough..I shall consider to join your life...!

May God bless you..A Truly 1Malaysia..!

alan tan said...

I would cancel all my Credit cards!

Unknown said...

No way I will reach the cap of RM200. Anyway, I guess Citibank Shell card is better for big spender. Well they may waive the fee for big spender over certain limit but not for everyone. This was the reason why I stop the Shell card as they refuse to waive the fee as I only used it for fuel.

Simon H said...

Have you checked your MaybankAmex statement Tony? My girlfriend bought plenty with that card as well,'thinking' that there would be an extra 15% discount but her latest statement says otherwise.
I really hate all these fine prints! I believe there is a limit of RM1000 per month which would qualify for cashback. That means you would only get RM150 discount. But, here's the shocker, if you divide 4 mil with 150, you get only 26666! I'm quite sure MaybankAMEX have much much MORE than 26666 subscribers. That would mean 4 mil payout would finish under a month, maybe even less than a week.
My take is, this is a gimmick to get people signing up to MaybankAMEX as AMEX have not been very popular with traders nor consumers.
I wished that they were more sincere with the consumers and perhaps introduce a RM4 billion cashback instead :p

audrey said...

YB,

Thanks for doing the homework for us. We returned 4 credit cards on New Year's Eve @ the banks itself. Not a problem...took less than 5 minutes for us to fill up a form & then they cut the cards up in front of us.

What a "cleansing" way to end 2009 & start 2010 with a less bulky wallet!

creditcard said...

a) Why didn't you consider cutting the other cards at the next expiry period? I'm sure not all your cards expire on Jan, right?

b) I have to agree on the annual fee thing though. In this day and age, all you need is to call up the customer service, and usually they will waive the fees for another 1 or 2 years. If you are still paying for annual fees, i got to ask: "which rock did you just crawl out from?" (Hint to NCKeat)

c) Shanmuga's comment is valid also. Tony, you will find that Mastercard in many places and many countries are far more popular and acceptable, even when compared with Visas.