the removal of interest free period for credit card user

Wednesday, June 4th, 2008

With effect from July, credit cardholders who don’t pay up in full and on time may end up paying more.

Last year, Bank Negara Malaysia announced a tiered pricing structure (TPS), which will be implemented this July 1, under which those who settle their minimum payments promptly will be charged a reduced interest of 15% to 17% per annum, instead of the usual 18%. However,
credit cardholders are now crying foul over a recent development - THE REMOVAL OF THE INTEREST-FREE PERIOD FOR THOSE WHO DO NOT PAY UP THEIR BILLS IN FULL.

Under current arrangements, credit cardholders enjoy a 20-day interest-free period on their new retail transactions. However, AFTER JULY, only those who make FULL PAYMENTS BEFORE THE DUE DATE will be entitled to the INTEREST-FREE DAYS. Those who make ONLY PARTIAL OR MINIMUM PAYMENTS will be CHARGED INTEREST ON THE DAY THE NEW PURCHASES ARE POSTED TO THE CARD’S ACCOUNTS.

In addition, the LATE PAYMENT CHARGE is NOW A MINIMUM of RM10.00 or 1% on TOTAL OUTSTANDING BALANCES; previously it was 1% of the minimum payment amount…’

————————————————————
-An excerpt from ‘News: Credit Cardholders, It Pays To Pay Up In Full’ by Tan Su-Yin, Personal Money - The Edge Magazine On Managing Your Finances, Issue #82, June 2008; pg. 10

Posted in article, financial | No Comments »