Treats Fair: The Benefits of Credit Cards
Credit cards are one of the best financial products ever offered. Sadly, this world has tainted them with horror stories where cardholders get themselves into mountain of debts.
But it doesn’t need to be!
I share this very recent story of mine to illustrate the wonders that come with credit cards.
Maybank just had their very first Virtual Treats Fair!
What is a… Treats Fair?
It is their annual exhibition event where they allow their faithful credit cardholders who earned points called TreatsPoints (TP) to use up their points to buy items from merchants that exhibit their products in this event. You can also use money instead of points to buy if you don’t have enough points or if you found some good deals during this event.
What does that have to do with me?
I had 290k TP on hand.
This is my 3 years’ worth of accumulated spending on Maybank credit card. I know that it is 3 years because my points begin to expire in July and TP has a 3 years expiry date. So I have got to use them up.
At the same time, my PC speaker’s subwoofer started to miraculously have a loud humming noise, which gives me a headache every time it was on.
You guessed it!! I went shopping immediately for a speaker. What wonderful timing for an upgrade.
Why change in Treats Fair?
Only on 3 July 2020, Maybank has an offer for its points conversion that goes like this:
| Normal | On 3 July 2020 |
|---|---|
| 500 TP to RM1 | 400 TP to RM1 |
This means that my TP is worth 20% more automatically:
- Normal: 290k TP = RM580
- Special: 290k TP = RM725
What did I get?
I found myself a Sound Bar, specifically the Vinnfier Hyperbar 800 BTR!
Retailing at RM599, you can easily get it down to RM569 by asking or buying it online.
The Math of Credit Card Points Conversion
In Treats Fair, this translates to 300k TP in normal circumstances, which is above what I can afford in TP currency.
But on the special day of 3 July 2020, this drops to 240k TP only! This is well within what I have in TP currency, with extra change.
Without further ado, I placed the order and checked it out. Now I am waiting patiently for the parcel to arrive at my doorstep and I had zero cash outflow.
Breaking down the real cost of Credit Card points
I mentioned upfront that I have 290k TP.
You may think, “Hey, you’re a big spender, but I am not”.
Let me break it down for you:
- Assuming 290k TP means RM290k spent over 3 years.
- That’s around RM97k per year.
- Translates to RM8k per month.
I’ll tell you this, I definitely do not spend that much on a monthly basis as well.
So how did I get 290k TP? That’s because for every RM1 I spend on the Maybank 2 Gold Cards American Express credit card (on weekdays), I am awarded 5X TP.*
*Take note that different credit cards offer different rewards/benefits
Now let’s redo the math:
- Take 290k TP divided by 5 = RM58k spent over 3 years.
- That’s around RM19k per year.
- Translates to RM1,600 per month.
That seems more reachable, ain’t it? Some may have more points, some may have less. It all depends on one’s spending capabilities.
Point about credit cards being…
3 years ago, I used TP to exchange a PlayStation 4. Also, without any cash outflow.
I do not have any credit card debt as I clear them in full every month.
My friends will know that I strongly advocate the idea of paying with returns. In other words, if I am going to spend, I better get something back.
Cash is always my last resort as a payment method because it does not give me back anything for spending.
At this point, credit cards are my preferred payment method, closely followed by E-Wallets nowadays (depending on what promotion they have). I have also mostly shifted from reward points to cash rebates.
You may refer more on my post here when I compare between the various spending methods.
Credit Cards: Word of Caution
With that said, it is important to understand that discipline is key to reaping the benefits of credit cards and not fall prey to the very real pitfalls of the plastic cards.
Treat using your credit cards no different from using cash, whereby you won’t spend more when you’re low on cash. And make sure you keep track of your spending as it is very easy to go overboard.
I’ll be covering on credit cards more later, especially these pitfalls and how to avoid slipping into credit card debts.
I also shared the mentality when it comes to budgeting in another post.
