Monday, October 26, 2009

MYR 50 credit card fee - Solve debt with more debt !?


Seeing that credit card debt has reached a serious and dangerous level, Malaysia government will start imposing MYR 50 fee on each credit card hoping people will reduce the use of credit cards and therefore reduce debt.

Although it may sound rational to some people, but its actually somehow a bit funny ...

For those who keep credit cards in closet, they actually use the cards as emergency loan facility. Admitting to hospital will go through smoother with a gold card etc. These people did not owe any credit card debt, they were NOT part of the problems to start with. But now they are affected and has to cut off some of these FREE loan facilities. Credit card debt NOT reduced, good people's personal finance affected.

Some pay off their credit cards in full every month. They use card so that they don't have to bring lumps of cash around. They were NOT part of the debt problem but now they need to take more risk bringing more cash with them. Credit card debt NOT reduced, good people's personal finance affected.

Then there are those who owe money - who have long winding credit card debt. They just can't pay off the debt. They are the target group to be help with this policy. How can adding MYR 50 on top of their debt help them ? They can't just simply stop the card, they will have to pay their debt. As long as they haven't finished paying their debt, the account is running and MYR 50 will be added every year ... as an encouragement fee to 'help' them reduce debt !? Credit card debt INCREASED, bad people's personal finance PENALIZED.

Lastly there are these group of people who haven't had credit cards yet. So when they apply for one, they will think twice. But these people are NOT part of the debt problem to be solved to start with ! Credit card debt NOT reduced, good people's personal finance instilled.

Call me dump and crazy, how can this MYR 50 fee help reduce credit card debt again !? There may be some good points identified but NONE will reduce Today's credit card debts !!

After all, do you think a credit card debt person wouldn't pay a small fee of MYR 50 to get a new card from this lady ? After all, he can pay off this MYR 50 in his next 30 years which is only less than $1 a month.

11 comments:

Sherry said...

You nailed it Michael. Just gonna make the poor poorer. The not-so-poor will be cutting their cards up already.

Just govt's way of making more money. After all, there are SO many credit card users now and multiplied by 4 card each (being conservative here)? Bucket loads of money!

Anonymous said...

yep, saw someone's reply in another forum, saying there are over few hundred thousands cardholders out there, if each pays $50, government would get some pretty extra income from there....some says it helps in reducing our budget deficit next year..well....

TheCurious said...

These dump policy makers sit their ass in the air-cond room too much of their time, thinking of funny "strategies" without walking into the RAKYAT real life.

Let's see how commercial banks come out with "innovative" counter-measure.

Michael Tsen said...

indeed, in this case, I think government will just abolish this or mark it as NOT enforce etc. Many other strong finance institutes already file in their view points in a more polite way to the finance minister.

ChampDog said...

You have an interesting point... never have thought of that. I bet a lot of good personal finance people out there is going to cancel their card...

Perhaps this may help those people who just about finish their debt and they are going to cancel their card because of this RM50?

Michael Tsen said...

yes ... it may help, except that 'those who are about to settle their debts' are not a big part of this whole debt amount ...

Jason said...

You know I just got a new credit card on the day of the new budget announcement.I am very fluster now.

yeah, maybe RM50 a year is very little.but it still money!!!

Michael Tsen said...

Keep cool, I properly have more than 10 cards and I am still proceeding to getting a new card from Ambank now so that my Nov and Dec groceries can have 10% discount ... cancellation instructions are ready and will only blast out after Christmas parties :)

which by January, all banks will call and explain how I should not worry about this RM50 ... :D

Tamara Holmes said...

With unemployment skyrocketing, and the credit crisis causing a hike in credit card rates nearly across the table, more and more people are having problems repaying all sorts of debts, from credit cards to mortgages. Those pesky credit cards, with their variable interest rates, seem to trap many, many people into a downward spiral of debts. However, if a person seems to be drowning in debt, the good news is that there are still options in how to reduce credit card debt.

Michael Tsen said...

nice advs :)

Celine Mook said...

I fall under the good people category! Pay all my credit card debts every month without fail and I have to pay RM50 extra to the govt?

That does not help me T_T