Tuesday, October 27, 2009

Budget 2010: Goodbye Credit Cards...

I wrote a quirky personal piece for TheNutGraph with regards to the Credit Card tax to be implemented from 2010 onwards.

I must say that Budget 2010, announced by Datuk Seri Najib Razak on 23 Oct 2009, contained quite a few surprises for better or for worse. And my observation is from someone who has poured through the government's budget over the past five years.

For one, I'll have to start picking up the phone over the next few weeks to cancel my many credit cards. An unwelcome announcement was that beginning 1 Jan 2010, we will be taxed for every card we own, regardless of whether we are or aren't in debt.

At RM50 per card, and RM25 per supplementary card, that's probably enough to set me back at least RM700 per annum. Yes, I have indeed a whole string of credit cards, but thankfully without any debt attached to them.

Read the full article at TheNutGraph ;-)


Anonymous said...

sounds do-able, some of the convenience and savings. . . time to add one or two to my one and lonely amex . . .

ais ~

KoSong Cafe said...

If the new proposal is meant to be a discouraging measure, then it should make it free for the one and only card each person has. As it is, it is punitive even to those who keep a single credit card for just in case.

It looks more like a policy to collect money from the public, this time, by the government rather than the banks (if I got it right)? A clarification would be welcome by most members of the public.

Anonymous said...

The Finance Ministry has claimed that the government is concerned about credit card debt, and we should be. But to quote a blogger, Lee Wee Tak: "If you want to control credit card debts, more effective measures would be to impose stricter guidelines on qualification, credit limits of cardholders and limit the number of cards held. Not by increasing the financial burden of all cardholders, whether they are having a debt problem or not."

I really wonder how he passed economics and being the Finance Minister. Nottingham University odd to revoke the degree or was there any wishy-washy thing going on.

Beats me. But one thing for sure our economy is really shitty.

Alfanso said...

I have many cards but never hutang single cent.Now i feel like being punished by government. shit

Anonymous said...

This tax on credit cards is not as serious as the property gains tax mentioned! I hope you will write further about the property gains tax. This is very unfair, especially to people like my parents who bought their homes more than 20 years ago when houses cost less than 10,000. Now, the price has ballooned up to hundreds of thousands and they are going to have to pay dearly, if they sell.

Anonymous said...

Hmm... I called a bank's contact centre and asked them about these ridiculous charges. I was told to "hold" on the scissors until December 2009 as they will try to appeal or "absorb" the charges.

Incidentally, a RM50 charge was imposed for a few years before this, but was dropped subsequently for no reason.

Notwithstanding the concern with credit card debt, IMO, imposing a charge for every credit card will not discourage credit card usage. Credit card holders will cancel whatever cards which they hardly use and that's that. For those who are in debt and cannot afford to pay off their debts and cancel, they will be further in debt.

It is a fact that credit cards are very useful financial instruments in a modern economy (as another form of money besides cash) and are acceptable almost anywhere, thus encouraging business. As it is, there are already numerous means of indirect taxation. It does not make economic sense to impose these charges.

Khun Pana aka johanssm said...

Why dont jibby just bans credit cards ?

As commented by most card holders , the way to control is to have stringent income qualifications to get a card , lower credit limit and of course lower credit charges by the banks .
Card owners will return their cards and some people will lost their job especially the card canvassers.

NEO said...

Do know which economic or tax school that Najis get the idea of imposing a Rm50 per card.

1) The tax didn't link to income or earning status. A Dato' which earned millions will paid Rm50 and a factory worker will also paid Rm50 per card.

2) the Rm50 per card didn't take into consideration of credit limit! A card will Rm5000 and another card which have Rm25000 will paid the same tax.

3) The tax didn't link to money supply in the macro-economy system. Example, YB will paid Rm700 per annum even without utilising the cards.

It is look like Najis get to know from his brother [CiMb] on the no. of card in circulation and would like to hijeck the annual fee [non interests income] from the banking sector.

Anonymous said...

Rm50 per card x how many millions of Malaysians have credit cards..???

And it goes to who & where...???
Any transparency on that....?????

"You take "MY" money & don't show me where it goes"....?????

Anonymous said...

I currently live abroad, just as well. When I was told about this credit card charge, I was shocked, and still am. It is appaling. I don't know how the government justifies this line of so called income. There are many people who do not hold a zillion credit cards and who clear their credit card balance every month. My mother was given a supplementary credit card for emergencies. She does not keep a lot of money in her current account and the credit card is just that in case of need, she can pay for her goods if she did not manage to go to the bank. She does not work and now she has to pay a fee for this? What kind of service tax is this? All I can see is that the government is taking advantage of the credit card holder population to get income and plug their financial 'hole'. This is no measure to control debt or to encourage better debt management. It is ludricrous. What a joke. I would call it daylight robbery. Lump it in with the annual budget and it becomes 'legal'. Truly pathetic.

mut said...

Maybe the government should learn better credit management and prudent spending.

The irony seem lost on them. 40k for a laptop anyone?

Anonymous said...

If things dont change I can foresee dark future for credit card companies when a few will try to attract the decreasing small number of credit card holders and also ,ess people will be applying for credit card
The victims will be the small credit card companies that cant compete with the offers of the large credit card companies
Poor Malaysians,,,they are so unfortunate to have idiots running the govt...
watever being said johore, negri sembilan and malacca are umno territories until kingdom come

Anonymous said...

To those UMNO/BN supporters.

I am still bewildered with all of you.

The government screw you with
high car prices (because of the stupid Proton),
PKNZ RM12B scandals,
over spending RM24B not accounted for,
billions and billions of Petronas money gone (no one seems to know where),
high petrol price,
you are shit taxed
and now they put a toll in your credit card,
and many more

Anonymous said...

The supporters of UNMO or BM wont shift their loyalty because the hear but they dont listen, they see but dont look, they think...but think like zombies. They talk but nonsense