With the cost of living continuing to pressure household finances, Malaysia is introducing a new basic credit card designed to make borrowing more affordable.
Unlike premium credit cards that focus on cashback, travel rewards and lifestyle privileges, the new card is built around a much simpler purpose: providing lower-cost credit for emergencies and short-term cash flow needs.
However, financial experts are also issuing a clear warning. A cheaper credit card should not be mistaken for an excuse to borrow more.
Here’s everything Malaysians need to know.
What Is The New Basic Credit Card?
The basic credit card is part of a broader initiative introduced by the Ministry of Finance in collaboration with Bank Negara Malaysia (BNM) and the banking industry to improve access to affordable financing for individuals as well as micro, small and medium enterprises (MSMEs).
Applications are expected to open in October 2026, with Maybank Islamic, RHB Bank and CIMB Islamic among the first banks to confirm they will introduce the product.
Unlike conventional credit cards that compete by offering cashback, travel rewards and shopping privileges, the new basic credit card focuses on affordability and responsible borrowing.
The goal is to provide consumers with a practical financial safety net during emergencies or temporary cash flow shortages instead of encouraging lifestyle spending.
Key Features Of The Basic Credit Card
One of the biggest attractions of the new card is its financing rate, which is capped at 14% per annum, making it lower than the existing industry maximum of 18%.
The card will also not charge any annual fee, making it more affordable for consumers to maintain.
Credit limits will be set at more prudent levels based on each customer’s repayment ability, with the aim of encouraging responsible borrowing rather than excessive spending.
Another key benefit is that existing credit card holders will be allowed to transfer outstanding balances to the new basic credit card without paying any balance transfer fees, helping borrowers reduce the financing cost of existing debt.
Who Will Benefit Most?
Financial experts believe the new card will benefit lower and lower-middle income earners, young working adults building their credit history, and consumers who occasionally require short-term financial flexibility.
Rather than serving as another lifestyle credit card, the product is intended to provide affordable access to credit when unexpected expenses arise or temporary cash flow problems occur.
The lower financing rate only applies when cardholders carry an unpaid balance after the payment due date.
Consumers who settle their entire outstanding balance every month will continue to enjoy interest-free financing, just as they do with existing credit cards.
However, for those who occasionally need extra time to repay, the lower financing rate means the overall cost of borrowing will be lower than many existing credit cards that charge up to 18% annually.
Some banks are also introducing additional consumer-friendly features. For example, RHB’s Sinar Credit Card-i will use non-compounding finance charges, meaning customers will not be charged financing on previously accumulated financing charges. This helps prevent debt from growing more quickly over time.
Experts Warn Against Overspending
While the initiative has been welcomed as a positive step towards making credit more affordable, experts caution that easier access to cheaper borrowing should never be viewed as permission to take on more debt.
Dr Liew Chee Yoong, Associate Professor in Finance at UCSI University, said lending decisions should continue to be based on a consumer’s actual repayment capacity rather than simply expanding access to credit.
He noted that many consumers already have multiple forms of unsecured debt, including personal loans and other credit facilities. Without careful affordability assessments, easier access to credit could increase financial risks for vulnerable households.
According to Bank Negara Malaysia, household debt stood at 84.8% of Malaysia’s GDP at the end of 2025. While this does not mean every household is under financial stress, the figure highlights the importance of managing unsecured borrowing carefully.
Federation of Malaysian Consumers Associations (FOMCA) chief executive officer Dr Saravanan Thambirajah also emphasised that a lower financing rate alone cannot solve Malaysia’s household debt challenges.
He said consumers should not assume that cheaper financing makes borrowing harmless. Credit should be used to manage temporary financial shortfalls rather than becoming a substitute for regular income.
Basic Credit Card: Paying Only The Minimum Can Still Be Costly
Experts also reminded consumers that making only the minimum monthly repayment can still result in debt accumulating over a long period.
Although the new basic credit card lowers financing costs, outstanding balances will continue to incur financing charges until they are fully repaid.
As a result, consumers who consistently pay only the minimum amount could end up spending much longer repaying their debt while paying significantly more than the original amount borrowed.
For this reason, financial experts continue to recommend paying the full statement balance whenever possible to avoid financing charges altogether.
Sources: 1| 2| 3
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