Credit Cards: To Cut or Not to Cut?

Lim Mun Fah wrote his piece on the RM50 fee on credit card imbroglio in mysinchew.com on December 23.

So, what has he to say now that we have only a few days left for the year before new cards are charged the insidious RM50 fee? What does it do to you? It makes you poorer and the government richer for not doing anything whether in cash or in kind. Some kind of daylight robbery. You are not too far wrong here, my friend.

Let me append his article in toto.

"Don’t protest, I mean no offence, please don’t be over-sensitive! In fact, it is just a joke among friends.

Since the government made an announcement to start imposing a RM50 service tax on credit cards next year, many people will ask: “Have you cut it?” when they meet friends.

To be honest, many people would like to cut it but the problem is, two months after the announcement was made, they are still wondering whether they should cut it.

The government said the measures was meant to encourage saving by reducing unnecessary consumption as well as reduce the problem of “credit card slavery”.

It is not necessarily the actual situation. But the government's tax revenue will be increased for sure.

Contrary to the government's view, instead of spending extravagantly, many people save money by using their credit cards. For example, you may pay electronic equipment in instalments without interest by using your credit card.

Some banks cooperate with insurance companies to allow its credit card users to enjoy a 3 per cent discount if they use credit cards to pay their annual insurance fees. Also, if you use your credit card to pay for fuel, you can enjoy a 2 per cent discount and at the same time you can accumulate points for gift redemptions. It is one of the ways to save money, too.

Some banks also work with shopping malls and allow credit card users to enjoy up to a 20 per cent discount if they use credit cards to pay for parking.

In short, if you know how to make good use of credit cards, it can be considered as smart consuming, too. Save a little bit here and there and you will find it comes to a considerable amount after a year.

On the contrary, if you do not know how to use your money well, even with only one credit card in hands it may also end up as “credit card slavery”. And even if you have no credit card at all, you still may have to bear a lot of debts.

The announcement was made two months ago and we have only 10 days to go before the official implementation date. However, only now the government is trying to clarify the doubts; isn't the “efficiency” too low?

In particular, the government said all credit card users will have to pay RM50 per principal card and RM25 for each supplementary card, but today, it announced the latest measures. Our officials are having the same style of doing things, just like the controversial measure of limiting the amount of petrol pumped by foreign-registered vehicles at petrol stations located in border states. They always give the impression of “hasty decision and rapid change”!

As we understand too well given such a “hasty decision and rapid change” bureaucratic culture, the people are unable to make a decision whether they should cut it.

However, although I don't know how other credit card holders feel, I have made up my mind and decided to join the 800,000 card holders to cut it!

I'm going to cut it, how about you? "

MY ANSWER:

I have cut most of the cards,anyway. As the government tax will only fall due on the anniversary dates of card renewals, I guess I have some time to use those cards without resorting to cut all of them.Finally, I guess I will shift to better value-for-money cards that will do the job of those 'dinosaur' cards I am holding currently. So, I am one of the 200,000 still holding some cards!