When my initial application was unsuccessful, i tried to appeal by pledging FD. I was only required to pay RM10 for the setem hasil to be affix to the 'right to set-off' form. Never heard of that 0.5% stamp duty thing at all.

OK. First and foremost you will need a FD account. If you don't have one, go and open one. After you got your FD cert, tell the officer you want to pledge this FD for credit card. From there onwards a knowledgeble officer should be able to assist you. Apart from the normal credit card application form, you are required to fill a "Right to set off" form and pay setem hasil. After all your form is filled and signed, the officer will submit the credit card application form, your FD cert and the right to set off form to card center for processing.