Malaysia’s Credit Card Debt in 2025: What Every Consumer Should Know

For Malaysians, credit cards have become a key part of everyday life. They allow us to be flexible and provide benefits and convenience in managing our money. However, these conveniences can also be very expensive. The Credit Card Debt Report 2025 that was just published has found that Malaysians need to be aware of how they use their credit cards if they want to be in control of their finances.

The Current Credit Card Landscape

As of 2024, 9.92 million credit cards were active in Malaysia, carrying an outstanding overall balance of S$35.1 billion. This means that both consumers and businesses alike owe an average of S$1,022 (around RM3,500) for every credit card account holder – potentially among the lower end when compared with Singapore or Japan – however, still a sizeable amount given household incomes and the rising cost of living.

Malaysians’ borrowing behavior is relatively stable and consistent with a number of other neighboring countries. As mentioned in the report, Malaysians generally hold to the income levels and do not allow credit card debt to rise to an excessive amount, unlike those to the east, such as in the Philippines, where credit card debt can amount to a much larger proportion of income. This does imply that the majority of Malaysians will therefore be ‘conscious’ of using their credit sensibly, however the burden of the debt is still burdening when factoring in interest.

The True Cost of Credit Card Debt

The average interest rate for credit cards in Malaysia is 25%, which is amongst the highest in ASEAN. Once we take into consideration the expected inflation in 2025, which is only 1.5% the effective cost of borrowing is 23.5%. Any balance you do not pay off in full can accumulate quickly, transforming a sensible purchase into an unwanted ongoing obligation. 

The report indicates that the average cardholder pays approximately S$240 a year (roughly RM820) in interest. That is money that could be saved, invested or directed towards basic needs rather than paid to a bank.

Malaysia’s Position in ASEAN

In contrast to its neighbors, Malaysia is located comfortably in the middle. Vietnam is seeing growth in card adoption while keeping average debt levels fairly low. Singapore leads the area when it comes to average balance with a much higher S$5,335 average balance bolstered by higher average income levels. 

Malaysia’s numbers appear sustainable, with no real evidence of an over-leveraged market. The only significant concern that should be monitored is with regard to the heightened cost of living pushing more of the Malaysian population into “revolving debt.” Revolving debt is defined by only paying the minimum balance each month, meaning they will ultimately pay far more in interest down the road.

Why Malaysians Should Pay Attention

These figures are not just for policymakers and economists. They matter for every individual who uses a credit card. Carrying a balance at today’s interest rates means that a RM1,000 purchase could cost hundreds more if not paid off quickly. With inflation reducing purchasing power debt can easily feel heavier over time.

Young Malaysians especially fresh graduates are particularly vulnerable to overspending. A small balance can quickly become unmanageable at such high interest rates. Developing good habits early such as paying off the full balance each month is crucial for staying financially secure.

Practical Tips for Managing Card Debt

The report offers practical advice that every Malaysian cardholder can follow to stay financially resilient:

1. Pay More Than the Minimum
Always clear your full balance whenever possible. Even a partial balance can accumulate significant interest over time.

2. Track Your Spending
Use budgeting apps or online banking tools to monitor spending. Awareness helps you stay within limits and avoid surprises.

3. Maximize Rewards Responsibly
Cashback, reward points and air miles are great incentives but they should never encourage unnecessary spending.

4. Consolidate When Necessary
If you carry multiple card balances consider a personal loan or a balance transfer offer with a lower rate to save on interest.

5. Build an Emergency Fund
Having a safety net of savings prevents you from relying on credit cards during unexpected expenses.

Final Thoughts

Malaysia’s credit card market remains relatively healthy but the risks are growing. Higher living costs, inflation and easy access to credit could quickly create a debt spiral for those who are unprepared.

For policymakers this is a cue to keep promoting financial literacy and monitor household debt. For banks it is a chance to create more transparent products that promote responsible spending.

For everyday Malaysians now is the time to take charge of personal finances. Credit cards can be a valuable tool but only when used wisely. Check your statements regularly, set reminders to pay on time and make sure every ringgit borrowed is working to improve your life not weigh it down.

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