Attention to all credit card holders (especially for the following mentioned banks), interest rates for outstanding credit card balances, and late payments will be revised higher. At least 3 banks, namely Hong Leong Bank, Ambank and Citibank already published the rate revision effective March 2012 on respective website.
What did Bank Negara Malaysia (BNM) said?
According to The Star Newspaper, a spokesman from BNM said the repricing of rates was not due to directive from the central bank, explaining that it was done by the banks. "However, the new rates are withing the range stipulated in Bank Negara's credit card guidelines," he told The Star.
Rationale behind the revision
Beautifully, banks said the revision was done to promote sound financial management by saying that the move would encourage card holders with outstanding debts to pay them off. But, what we understand is that for those who are in debt right now, they were being slapped with a higher finance charges plus late payments charges. Meaning, they are being drown from river to sea, pushing them into deeper debt. Is this called sound financial management?
Perhaps, YES, it is a very sound risk management for banks, definitely not card holders. Why banks revise the rates now? Well, we guess that banks are foreseeing a tighter money supply and potential deteriorating quality of loans amid the ongoing European Debt crisis. They have their strong point though.
If I am a new card holder, what is the financed rate applied to me?
The highest finance charges will be applied (etc 18% p.a for Hong Leong Bank). The applicable tiered finance charges will only be effective until such time when you have the minimum 12 months repayment record with the bank.