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I have a love-hate relationship with Air Asia, I like its air ticket affordability but sometime it unreliable flight scheduling is simply too much to bear. Therefore when you start putting both the good and bad together, you will see that the ‘cheap’ or so-called the ‘big deal’ is more often than not, a self-imposed illusion. Sad to say that, the newly launched Citibank-AirAsia co-branding credit card bears all the same illusion trademark.

How it works
Charge your credit card and get rewarded with free air ticket! This is the great promise offers by the Citibank-AirAsia credit card. We all like the idea of getting something out of nothing! Unfortunately, this is not the case!

The redemption point is only given when there is an outstanding balance in the card. In short, the reward point ‘rewards’ your financial slacking, it encourages you to spend and spend, and only pay the minimum due. The non-expiry evergreen AA points will make you forever ‘indebted’ to the card. And if you settle your credit card bill in full and promptly, there is nothing for you to gain.

The Caveats

Here is a closer look at the ‘freebies’:

For opening balance less than RM2,000, each AA points is worth RM0.006. Now here come the interesting part, at 18% p.a, the interest charges for a RM1.00 outstanding balance is RM0.015 per month, this is the ‘cost’ you pay for the ‘free’ AA points. Essentially you are paying RM0.015 for an item worth only RM0.006, that is 150% more!

For outstanding balance more than RM2,000, each Ringgit will be given two (2) AA points. Since the minimum AA points needed to get the lowest value voucher, RM20 is 3,400 points, to take advantage of the 2x points, a total of RM2,000 is needed on the opening balance (actual AA point earned is 2,000×2). The month interest is thus RM30. Again, that means someone is paying 50% more than what the item is really worth!

The point is when we start accumulate balance in our credit card, sooner of later, it will take its own life and victimized us.

Conclusion
The key point is not how much an AA point worth, but rather is a question do we need to get ourselves trapped the never ending credit card debt ?

AirAsia and Citibank have a high confidence of the card and they are targeting to enroll 1 million card members. With a total of 9 million credit cards in the country now, 1 million is a very aggressive target. How the target was derived may very much reflects how uneducated, and in general, greedy we are when come to credit card marketing scheme. Therefore, before you sign up any credit card of financial products in that matters, always ask and check the fine print, and only than make a decision. The Citibank-AirAsia ‘free’ flight is the flight you want to miss , if not, instead of flying anyway, you will be grounded for a very very long time

All right, but isn’t it the Citibank-AirAsia credit card is still a credit card? Yes, but if you take out the ‘free’ AA points, it is just another ‘me-too’ credit card without anything attractive. If that a case, find one that waive the annual fees for couple of years, or best at all, those that without annual fee at all.

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