Recent announcement of new guideline on credit card is nothing new as in the past only those having annual income of RM24,000 could apply for credit card. Therefore, the so called new ruling is nothing new but the same old guideline.
Owing to keen competition and big money that banks and finance companies could earn from the card business, some credit card companies could have relaxed certain terms and conditions so as to build up customers base. This could be the very source of credit card debt building up in Malaysia. The all out promotion of credit card with gifts and zero interest installment could have prompted credit card owners to spend ‘wildly’ without seeing the danger of over-spending.
The ‘new ruling’ of minimum monthly income of RM2,000 could not guarantee new credit card owners ability to repay. Since the credit limit is more or less similar to ‘clean loan’, shouldn’t the banks, finance companies and credit card companies look at how much the credit card could save monthly before granting a credit card with credit limit to the applicants? Applicants could be earning RM10,000 per month but in some cases they could only save RM100 per month owing to high financial commitment therefore it makes no sense to base on monthly income instead of monthly saving.