smartconsumerbanking.com

As predicted in earlier post, credit card issuer in Malaysia is wasting no time to take advantage of new credit card interest charges recently announced by Bank Negara Malayisa (BNM). Affin Bank, one of the smaller banks in Malaysia, has just drastically slash the 18% credit card interest rate by half at 9.99% p.a., more than what BNM asked for, thus in a stroke, making it the lowest rate in the market.

Applicable to those who make the minimum payment on their outstanding balance on time, Affin Bank new low rate take immediate effect new credit card applications, and for existing member, 31st August.

Giving its rather small credit card user base - how often do you see a Affin Bank credit card, this is a smart move (but risky) by Affin Bank to grab the initiative from other more established competitors and jump-start it membership drive. Until another bank came out with a lower rate, the 9.99% will give Affin Bank plenty of ammunitions and bragging rights in the way it market its card.

Implications
It is likely that most banks in Malaysia would wait-and-see before deciding how best to response to Affin Bank. But if you owned any credit cards from others more established banks with large usage base, it is rather unlikely that they would jump to the price-cut wagon, for them, the interest cut is simply too much to lose and too little to gain.

If you are those always paid your credit card in full and on time, this will be a no event to you.

Of course, if you are struggling with the high financial charges on outstanding balance, Affin Bank is THE card for you. Switching to such low rate card is a smart move to reduce financial burden and stress.

And if your are looking at balance transfer, you might want to take note. With the current BT interest ranging from 7% to 11%, essentially Affin Bank’s 9.99% is a hassle free BT in perpetual. This is likely to effect the overall BT market rate. According to its press release, Affin Bank is also planning to roll out 0% interest for BT up to 12 months.

Bottom line
In 2006, some 1,650 Malaysian were bankrupted by un-check credit card spending. According to Bank Negara Malaysia’s statistic, he total outstanding credit card balance has been on a rising trend and stood a record high at RM20 billion at end of 2006, that means, on average, each of the 2.5 million cardholders carries a staking RM8,000 debt.

It is up to us to take full advantage of the increasingly liberated financial market to sort out any financial woes if any, and learn to be prudent financially, which means, always pay your card in full and on time.

Did you enjoy this post? Please Subscribe via RSS. Please also share you comment with other readers..