This article first appeared on RinggitPlus

In my previous post I talked about making some quick money fixes in your life, whether you were an SME owner or a consumer (or both).

In this one, I’ll go through in a little more detail what an example of a fix you could do very quickly (within 1-2 weeks) to put some money back in your pocket, specifically using a cash back credit card rather than cash.

What are Cash Back Credit Cards?

Many credit cards in Malaysia offer direct cash back and rewards points just for doing your daily spend by paying with the card instead of using cash. What’s cash back? In practice most people will see some amount of money deducted off their monthly credit card bill, so you effectively pay less. What are rewards points for? You can convert those points into things like airline miles (but probably not during these times), cash vouchers, and household items.

You might say “OMG Hann are you asking me to take on debt during this time?” Actually, cash back credit cards are my favourite type of credit cards because it’s a rare kind of credit product that you can actually make some money directly from…as long as you follow my 5 golden rules below of course!

If you don’t know what Credit Cards are yet, maybe have a read of my team’s previous Credit Card Basics article first before coming back here.

Bottom Line:

All else equal, instead of spending using cash, if you use a cash back credit card, you make money.

Hann's 5 Golden Rules Of Using Cash Back Credit Cards

Repay your entire monthly bill on time every month.

Remember, you should have had the cash anyway to spend on whatever you were supposed to spend on. Not paying your monthly bill in full will result in interest charges on the balance that you don’t pay off. If you are not sure if you can repay your card in full and need some short term credit, don’t choose a cash back credit card, you might want to consider Low Interest Credit Cards in Malaysia instead.

How Cash Back Credit Cards Work

Quite simply, when you spend with your cash back credit card (whether on groceries, petrol, eating out, e-wallet topups, or various other categories) you get a portion of that spend rebated off your statement bill every month. This equates to “instant savings” while spending, versus zero net benefits using paper Ringgit.

Some cash back credit cards will give cash back on multiple/all categories spend such as the Maybank 2 Cards (Gold & Platinum), the Maybank FC Barcelona Visa Signature, or the Public Bank Quantum Visa (but, FYI you have to “wave” it). Other cash back credit cards will give cashback on specific categories only. For example, the Citi Cash Back Mastercard gives high cash back on the following categories: Petrol, Groceries, Dining, and Grab Rides; but virtually nothing (just 0.2%) on other spend.

Here is a simple example of how you calculate and see cash back in your credit card:

Public Bank Quantum Visa – 5% Cashback on all Contactless spend (with some exemptions) up to RM30 a month.

Let’s say I spend RM500 in a month on ‘wave’-ing for my grocery shopping, eating out at restaurants. I’ll then see RM500 x 5% = RM25 deducted off my credit card bill in my next statement. This will appear as an entry on your statement, so you can’t miss it.

3 Main Types of Cash Back Credit Cards

Capped Cashback On All Spend
Progressive Cashback Tier On All Spend
Category Cashback Unlocked by Minimum Spend

Usually high single cash back rates (5% is considered solid) but limited to a small amount of spend. These cards also do not have minimum spend requirements, so you earn cashback from the first Ringgit spent.

Examples: Maybank 2 Cards Gold & Platinum, Public Bank Quantum Visa & Mastercard.

Progressive Cashback Tier On All Spend
Category Cashback Unlocked by Minimum Spend

How I Use The Best Cash Back Credit Cards in Malaysia To Make A Little Extra Money

To give everyone a better sense of what I mean, here is a quick illustration of my household’s monthly spend, using several top cash back credit cards in Malaysia.

Spend Category	Monthly Spend (RM)	AffinBank Visa Signature	Citi Cash Back Platinum	Standard Chartered JustOne Platinum
Petrol	250	7.50	15.00	37.50
Groceries	1,000	30.00	15.00	2.00
Online	250	-	0.50	30.00
Dining	500	15.00	15.00	1.00
eWallet top ups	500	-	15.00	1.00
Others	500	15.00	1.50	1.00
Total spend/cashback earned per card	3,000	67.50	61.50	60.00 (the sum doesn't add up because RM60 is the max monthly cashback)
Annual total spend/cashback earned per card	36,000	785.00 (after SST)	713.00 (after SST)	695.00 (after SST)

For a typical household, you can immediately see that you can save several hundred Ringgit per year, just from swapping from cash to a cash back credit card, or swapping from another card which doesn’t offer cash back to one that does. Remember, the more you spend, the more cash back you earn. BUT don’t spend more just to earn the cash back though, otherwise you’d have broken Golden Rule #2.

Note there is no such thing as a “best” cash back credit card for everyone, as it really differs depending on your monthly spend (and sometimes spend pattern like weekend/weekday spend etc.).

Bonus Tips!

Bonus Tip 1 – Don’t forget to combine credit card cash back with other forms of cashback, including:

e-wallet cash back – top up your e-wallet with eligible cash back credit cards and get both the credit card cash back as well as any e-wallet discounts or cash back when you spend with the e-wallet. Some e-wallets, such as Boost and Grab, also give rewards points for every Ringgit spent, which means even more potential savings down the line.
Online cash back – sites such as Shopback or Milkadeal offer cashback off online spend, so you can get both the credit card cash back as well as any online cash back.

Bonus Tip 2 – If you spend enough on each category (but not enough on others), combine 2-3 cash back credit cards and maximise your cashback (e.g. double up on petrol with 2 cards, dining with 2 cards etc.)

As you can see from my household spend above, my illustration only displays the maximum cash back you can earn per card. Now, I can actually earn even more cash back by combining multiple credit cards into my monthly spend. Why complicate things if one card can already earn you cash back? Most cash back credit cards have a cap per category that may be below your monthly spend for that category, and that means lost opportunity to earn cash back. If you think that will not amount to much, think again.

In my household spend illustration above, I only earn cash back for up to RM150 in spending per category if I only used the Citi Cash Back Platinum Mastercard. But if I spend only that amount per category and then switch to the Affin Bank Visa Signature on Dining and Groceries spend, I’ll earn an extra 3% cashback on the remaining RM350 spend in Dining and RM850 in Groceries – which equates to an extra RM36 per month or RM432 in a year!

This requires extra planning, and will differ with each individual’s exact spending on specific categories. But if you do your homework, you will literally be rewarded with several hundred Ringgit each year.

Want a headstart? My editorial team has compiled an up-to-date list of the best cash back credit cards in Malaysia – you can use this as a reference.

Don't Underestimate The "Small' Cash Back Percentage

I’ve met clients in my financial advisory days who did not believe that cash back credit cards can make a big difference. “2% only”, “5% only, and capped some more! So ma fan to track!”

But when we break down their monthly expenses, and offering a few cash back credit card options, their attitudes changed quite dramatically when they see the “5% only” turning into RM600 or more in one year.

Meanwhile, the more advanced credit card users would tell me that air miles credit cards give much better returns. I agree: the best air miles credit cards in Malaysia offer effective returns of anywhere between 4% all the way up to 20% by redeeming flights (Business Class and above yields better returns), but this return takes years to realise – it usually takes tens of thousands of Ringgit spent to accumulate enough air miles to redeem a “meaningful” return flight. (Plus, who knows when it’ll be safe to fly again?)

For some groups of users, this makes sense – you’re redeeming a Business/First Class flight that you’d never have spent money on, and it is quite a life experience to savour. But for the everyday Malaysian, a cash back credit card guarantees immediate returns each month.

And at a challenging time like this, every little bit helps.