The cost behind Maybank EzyCheque Instant Cash

My first credit card is a Maybank classic card which I have kept for almost 10 years.

I can't remember since when, Maybank will send me every year without fail a promotional letter about EzyCheque Instant Cash promotion attached with a RM2000 cheque that I can bank in to my bank account before the expiry date as stated in the letter.

This Maybank EzyCheque Instant Cash facility always says it is "0% or interest-free for 6 months", but also with a so called "low cash advance fee of 3.88% or RM77.60". However, it is only "0% or interest-free" if I settle the repayment of RM333.33 every month for 6 months subsequently, there will be interest charges for late repayment and also penalty charges for early settlement (which could be caused by card cancellation, balance transfer, etc.) before the 6th month.

Let's say I accept the offer, and follow the scheme exactly, then I'll:

• Get RM2000 after I bank in the cheque.
• Charged RM77.60 for cash advance fee in my next credit card bill.
• Charged RM333.33 in my next 6 months of credit card bill.

What will be the actual cost then? Here is the calculation:

• I get RM2000 - RM77.60 = RM1922.40 from the bank.
• I pay back RM333.33 x 6 = RM1999.98 to the bank.
• Therefore, the cost incurred is RM1999.98 - RM1922.40 = RM77.58
• That will translate into RM77.58/RM2000 x 100% = 3.88%

Of course, this 3.88% in 6 months is comparatively cheaper than getting a normal credit card cash advance or personal loan. However, it only make sense to utilize this EzyCheque Instant Cash facility if I can earn back at least RM77.58 with it in the near future.

If I were to:

• spend the RM2000 to buy things, I will end up losing another RM77.58 which is good enough to have a nice dinner in a classy restaurant for two.
• use the money to settle any debt which interest rate is more than 7.76% per annum, I can save some money from there.
  
• keep the money in a FD account with interest rate at 2.5% per annum, I will need to keep it for at least 2 years to recover back that RM77.58. After that, if I don't withdraw the money, it will start working for me by bringing interest income.
  
• keep the money in a Flexi-homeloan account with interest rate at BLR-2% = 3.55%, I can save about RM5.70 housing interest every month, which will take me about 14 months to recover back that RM77.58. After that, if I don't withdraw the money, it will start working for me by saving RM5.70 every month until my homeloan is settled.
• invest the money in short term investment and make a return of more than 10% within a year, then I can make some pocket money with it.
• invest the money in long term investment and make an annual return of more than 10%, then I can probably double or even triple it up in years to come.
  

Sometimes, I opted to tear and discard the EzyCheque, and sometimes, I opted to utilize the facility. It all depends on how I'll use the money. The key point is that, by utilizing the facility, we are using our future money (in the subsequent 6 months) at the cost of 3.88%.

It all depends on whether:

• there is an urgent need for the money
• it is a good investment timing

Do not be afraid of that RM77.58 cost if you know that it worth to spend, but also do not waste it blindly.