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Malaysia: Credit card interest charges to stay
MALAYSIA will not abolish interest charges imposed on credit cards used in retail shopping, Deputy Finance Minister Datuk Othman Aziz said.
Abolishing interest on credit card usage does not necessarily benefit the Malaysian economy. Instead, it could encourage excessive spending and a general lack of discipline among credit card holders, he said in reply to Datuk Seri Hasan Malek (BN – Kuala Pilah).
Othman said that there were 9.9 million credit cards in circulation as of last December, with 8.8 million of them being primary cards registered to 3.7 million individuals.
On questions of bankruptcy and debt management among credit card holders, he noted that Bank Negara had carried out many initiatives since 2006 to protect cardholders.
The Credit Counselling and Debt Management Agency (AKPK) has helped to settle the outstanding debts of 158,116 credit card holders totalling RM6.5bil via its debt management programme as of January this year.
“For those at risk of bankruptcy, they can also consider voluntary arrangements to settle debts through the services of AKPK as a nominee,” Othman added.
Meanwhile, Deputy Minister in the Prime Minister’s Department Datuk Razali Ibrahim said 14,108 individuals who were declared bankrupt were discharged from bankruptcy status between 2013 and last year.
He said the number was 14.2% out of 100,610 individuals declared bankrupt in the same period.
“Of this, 69.1% were men and 30.9% women,” he said in reply to Er Teck Hwa (DAP-Bakri).
Razali said the Government was targeting to release more individuals from their bankruptcy status as the large number could affect national productivity.
With AKPK and approval for the amendment of the Bankruptcy Act 2016 last year, the mission could be achieved, he added.
Under the amendment to the Bankruptcy Act 2016, the maximum bankruptcy amount was raised to RM50,000 from the previous RM30,000.
The Act, which was passed by Dewan Rakyat on March 29 last year, also provides bankruptcy protection for social guarantors.
Source: https://www.thestar.com.my/news/nation/2018/03/15/credit-card-interest-charges-to-stay-minister-abolishing-it-might-lead-to-excessive-spending-among-s/#hbbgwUDSAYhZ6VXH.99