There still have a lot of Malaysians do not know how to prioritize their interest charged and interest earned. I can see that there are quite a great number of people who save large amount of money in bank but keep the unpaid balances on their credit cards. If can, try do not practice in this way!
Generally, Malaysian credit cards charged 18% interest rate on unpaid balances. In other words, it is the amount that you will pay in interest charges per year.
18% / 365, so that’s about 0.049315% daily interest.
One thing you should know is credit card interest is charged based on a daily compounding basis, so you will end up with interest being charged on daily basis.
If you have RM50,000 fixed deposit savings which guarantee you 2.85% per year, while meanwhile you have an unpaid balance on your credit card of RM35,000, which costing you an interest rate of 18%, then you are sacrificing unnecessary money for bank profits.
Do you know why? This is because you pay off RM35,000 credit card bill which costing you more than monthly interest of RM525 but your savings which is earning you less than RM120.
So, what you should do is paying more attention on interest rates either interest charged or interest earned, and from there you can save a lot of money.