My RM50 Service Tax From Credit Card Waived

Posted by Kris | Saturday, March 26, 2011 | | 5 comments »

I just got an SMS from my bank, that my RM50 service tax for my credit card have been waived for this year!! Yipee!!

I am not sure whether it is because of my high consumption/usage of my credit card  last year or that because of increased competition because of the coming latest credit card limit rulings from BNM. I think BNM must impose harsh punishment in the event of Banks flouting the rule so that this new ruling will have any meaning and positive effect at all. Credit card usage is one of the most lucrative business for Banks because of the HIGH overdue interests.

The next measure Bank Negara took was to raise the minimum income limit to RM24,000 per annum for people to be eligible for a credit card. It is also limiting the number of credit cards to two for people earning less than RM36,000 a year.

The reason for worry for credit cards stemmed from the growing use of credit for transaction purposes.
Bank Negara says that despite a reduction in the number of cards owned by households following the imposition of a RM50 fee by the Government on credit cards in 2010, outstanding credit card balances increased by 15.2% to RM30.8bil at the end of last year to account for 5.3% of household debts. It further says that outstanding balances per credit card holder rose by 15.1% to RM9,516 as at end-2010.
“The number of credit card holders with revolving balances (excluding defaulters) accounted for 47.9% of total credit card holders. More than half of credit card holders with revolving balances were those earning an annual income of RM36,000 and below,” it says in the report.
Meanwhile, the level of non-performing loans (NPLs) ratio for credit cards issued by banks and non-banks remained low at 1.7%.
I read that Malaysia got the highest household income to credit debt when compared to Singapore and US. Remember that US economy fell because of the carelessness of using credit card rampantly. However, I do know what alot of people are using their credit card to roll their finance month after month by paying only the minimum amount or will clear off the debt by the end of each month.
The next step Bank Negara is taking is to stress-test individual borrowers to gauge if they can afford a new loan once new guidelines are introduced in the third quarter of this year.
The new guidelines are designed to inculcate responsible lending practices by financial institutions when dealing with retail customers where borrowers will be subject to a suitability and affordability assessment and verification of income.
The reason for that is while there are education programmes to inform young borrowers about getting into debt and how to manage their finances, clamps need to be also put in place because the last thing anyone wants is a homegrown sub-prime crisis.

It is mostly like that more regulations will be put in place by Bank Negara to curb over-excessive loan & debt growth in Malaysia. At least Bank Negara is quick to realize the potential of a loan bubble in Malaysia especially in property. Kudos to that. (Malaysia is known as country that only take measures when something bad already happened)


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5 comments

  1. ChampDog // 3:19 PM  

    Same here I received the same sms few days ago. Usually I need to call them up to waive but now I don't even need to! :D

  2. Kris // 4:26 PM  

    Hmm..I got charged once for the RM50 tax. I guess lately i been using my card heavily.

    I do know that some of my friend card, a single card can swipe like for RM70K!!.

    So BNM, is right to be concern with the banks usual practices.

  3. Simon // 6:32 PM  

    which bank giving gst waive?

  4. Kris // 12:27 AM  

    @Simon,

    HSBC gave me the waiver. :)

    Not sure whether other banks give it out or not.

    @Readers, out that lets share out if you guys/gals got the waiver or not.

    Rgds,
    KnowThyMoney

  5. ahsiang - known as "吹水 - CHUI SUI" previously // 8:44 AM  

    Standard Charted (new card): give cash back which cover the Credit card tax
    Standard Charted (existing card): swipe a few times to get waiver

    Public bank (new card): give cash back swipe a few times