Using Your Credit Card the Right Way

Managing your finances with a credit card can be convenient, flexible, and a great way to build your credit score. However, if used irresponsibly, credit cards can lead to high-interest debt, lowered credit scores, and financial stress. It is important to be aware of the right way to use your credit card, and we’re here to provide practical tips to help you manage it efficiently. Whether you are a first-time credit card user or a seasoned cardholder, this article will help you get the most out of your credit card.

Using Your Credit Card the Right Way

Understanding Credit Cards

Responsible credit card use requires an understanding of how they work. Credit cards allow customers to borrow money to buy goods or services. The credit limit is the maximum amount a customer can borrow. The customer then repays the borrowed amount. There are fees and charges associated with credit cards such as annual fees, late payment fees, balance transfer fees, cash advance fees, and foreign transaction fees. It is advisable to understand the different fees and charges to avoid unnecessary costs.

Using Your Credit Card Responsibly

a. Setting a budget and sticking to it

This means understanding your income, expenses, and credit limit in order to plan your spending accordingly. By setting a budget, you have a clear guide to avoiding overspending.


b. Paying your credit card bill in full and on time

When you pay your credit card bill in full and on time each month, you avoid interest charges and late fees. Additionally, paying on time and in full demonstrates to lenders that you're a responsible borrower and can help improve your credit score.


c. Regularly monitor your credit card statements

Monitoring your credit card statements regularly is vital for detecting any errors or fraudulent activities. This allows you to ensure that all charges are accurate and that there are no unauthorised transactions. With the HLB Connect App, you can keep track of your card activities including your latest account balance, payment due date, and available credit limit with ease.

Using Your Credit Card the Right Way

Building Credit Scores with Credit Cards

Building credit scores is an important aspect of financial planning, and credit cards can be a valuable tool in this process. Credit scores are calculated based on several factors, including payment history, credit utilisation, length of credit history, types of credit, and recent credit inquiries. With consistent, responsible credit card usage, you can build a good credit history and achieve your financial goals.

Maximising Credit Card Benefits

Maximising credit card benefits can help you save money and earn rewards on your everyday spending. There are several types of rewards, including travel rewards, cashback rewards, and points-based rewards. You can redeem these rewards for travel, vouchers, merchandise, or offsetting your credit card annual fees. Credit card perks and benefits can also help you maximise your credit card benefits. These may include travel insurance, complimentary airport transfer, airport lounge access and more. It's important to review the benefits offered by your credit card and make sure you're taking advantage of all that's available to you.


Using Your Credit Card the Right Way


Additional Information

Here are some additional information on credit card balance transfer, cash advances, and flexible payment plans in Malaysia. Balance transfer for credit cards allows you to transfer high-interest debt from one or more credit cards to a new credit card with a lower interest rate. This can help pay off your debt faster. However, balance transfers usually come with a fee, so it's important to weigh the costs and benefits before transferring. On the other hand, cash advances for credit cards can be a tempting way to access cash quickly, but they come with interest rates and fees. Flexible payment plans for credit cards allow you to split your payment into smaller, more manageable instalments, but they may also come with additional fees and interest charges. It's important to understand the terms and conditions of these options before using them.


In conclusion, if you use credit cards properly, they may be an effective tool for managing your money and help you reach your financial goals. You can get the most out of your credit card by being knowledgeable of how it works, using it responsibly, improving your credit score, and taking full advantage of its features.