No More 20 Days Interest Free For Credit Cards
Recently, wifey had a closer look at her credit card bill and was surprised to see late charges and interest charge. We called to find out “WHY”? Okay, for the record, we made the mistake of not paying the bill in full. Not because we don’t have enough cash but keyed in the wrong figure and paid a few ringgit less. As a result, we were penalized enough cash for a meal. The penalty include interest charges and late payment charges. We found out was the following and for your info and action.
Interest-Free Period
As of July 2008, the 20 days interest free period given by credit cards will only applicable to those who make full payment. If you carry forward balance or don’t pay on time, you will be charged with interest charges, calculated from the day the new purchase is made. No longer from the date the payment is due! This means, the interest free period is only available for those who pays in full and on time.
Late Payment Charges
The new late payment charge is now based on total outstanding amount, not minimum monthly payment anymore. Did I hear a collective gasp? Late payment charges increased from 1% or RM5.00 to RM10.00 on total outstanding balance, of the minimum payment amount.
The slightly good news is Annual Interest Rate
The Annual Interest Rate tiered pricing structure (TPS) is implemented at the same time. Where the annual interest rate used to be 18%, for card holders with good and prompt payment, the rate is between 15% to 17% per annum (depending their payment history over a 12 month period).
The conclusion? Banks are bad! No. You just need to know the rules of the game. The banks reward a prompt consumer with lower rates and penalized those that don’t. Although this is an attempt by BNM to force banks to charge lower rates, they might just make more money this way.
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