Joint media statement by The Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM)

Kuala Lumpur, 21 November 2025 – The Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) are encouraging consumers to make informed financial choices when considering the Cash Advance feature on credit cards and to explore more affordable and sustainable financing options that can better support long-term financial wellbeing.

Why This Matters

Financial stress can affect individuals and families from all walks of life, whether due to rising living costs, unexpected emergencies, or unforeseen income disruptions. In such situations, quick access to cash may seem like the only solution. However, using a credit card Cash Advance may lead to significantly higher costs that accumulate quickly, potentially placing consumers in deeper financial difficulty.

This advisory aims to provide clarity and support in making informed financial decisions.

Understanding the Cost of Cash Advances

While credit cards offer convenience and flexibility for everyday payments, Cash Advance serves as quick and convenient option for emergency cash needs, rather than a long-term borrowing/financing tool. When using the Cash Advance facility:

• A one-time fee is charged immediately at the point of withdrawal.
• Interest/profit starts accumulating from the date of the transaction/withdrawal, with no grace period.
• The applicable interest/profit rate is typically higher than other forms of financing available in the market.

To manage your balance effectively, it is best to settle your Cash Advance amount as soon as possible, as timely settlement helps to minimise any applicable fees or charges and keep borrowing/financing costs manageable.

Better Alternatives That Support Financial Stability for Financial Management

Banks offer a variety of financing solutions designed to help customers manage their expenses more effectively. These options can lower overall costs while providing structured and predictable repayment terms. For customers seeking Shariah-compliant choices, Islamic financing delivers ethical and transparent options for long term needs. These products are structured around buy and sell arrangements, ensuring transparency in how prices are determined. They are also reviewed by an independent Shariah committee, providing an additional layer of oversight and stronger customer protection. Below are some options across both conventional and Islamic offerings, customers can
explore options such as:

• Personal Loans/financing – Offer fixed monthly instalments and typically lower rates than cash advances, helping customers plan their budgets with confidence.

• Credit Card Instalment Payment Plans – Allow cardholders to convert purchases into affordable monthly instalments. Many banks also provide 0% interest/profit or low management fee plan.

• Microfinancing – Designed for smaller, immediate business needs with manageable repayment options with flexible tenures, making larger expenses easier to manage.

These solutions are often more sustainable and better suited for long-term financial planning, helping consumers manage their commitments with greater ease and control.

Empowering Consumers to Make Confident Financial Decisions

We understand that financial challenges are personal and can be complex. ABM and AIBIM are committed to strengthening financial literacy and ensuring consumers have access to tools and advice to regain control. Individuals seeking impartial support can contact Agensi Kaunseling dan Pengurusan Kredit (AKPK), which provides free financial counselling and debt management programmes.

A Shared Commitment to Financial Wellbeing

The banking industry continues to play an active role in promoting financial resilience and protecting consumers. By raising awareness of the implications of Cash Advances and highlighting better alternatives, ABM and AIBIM reaffirm their commitment to supporting consumers in navigating financial challenges with dignity, clarity, and confidence.

Key Reminders for Consumers

To support consumers in making informed financial decisions, here are some simple and practical reminders:

🔷 Before You Withdraw Cash Using Your Credit Card:

• Ask: Is this the most affordable option available to me?
• Consider alternatives such as personal loans or instalment plans.

🔷 Be Aware of the True Cost:

• Cash Advances incur immediate fees and interest charged from Day One.
• The total repayment could be significantly higher than the amount withdrawn.

🔷 Explore Better Options:

• Structured repayment plans help you manage monthly commitments.
• Islamic financing provides transparent and ethical alternatives.

🔷 You Are Not Alone:

• AKPK offers free support to help you manage debt and financial planning.
• Speak to your bank – many banks have programmes to assist customers facing
  financial stress.

Remember: The best financial decision is an informed one. Taking a little time to understand your options today can protect your financial wellbeing tomorrow.