Credit card interest stays
> Govt has no plans to abolish charge
KUALA LUMPUR: The government will not abolish the interest charge on credit cards, the Dewan Rakyat was told yesterday.
Deputy Finance Minister Datuk Othman Aziz said the government had no intention of following the method taken by the UK.
He was responding to a question by Datuk Seri Hasan Malek (BNKuala Pilah), whether the government had any joint programme with the central bank and local banking industry to abolish the interest charge on credit cards as was done in the UK.
“Many preventive measures have been taken by Bank Negara Malaysia since 2006 to avoid credit card borrowers from being in debt for the long-term,” Othman said.
The measures include allowing only eligible users to be given credit facilities and increasing the minimum annual salary from RM18,000 to RM24,000.
A consumer credit law has also been enacted to govern credit supply and protect consumers.
“The reduction of interest or even abolishing interest charges on credit cards as implemented in the UK will not necessarily benefit the economy.
“Instead it will promote a habit of non prudence and indiscipline among credit card holders,” Othman said.
He also said the impact of credit card debts leading to bankruptcy is still relatively low.
Only 1,598 or 0.04% of credit card holders were declared bankrupt for high debts as of end-2017, he said.
“The total number is still under control and there are many preventive measures being taken to ensure those given credit cards have the ability to pay.
“For those who are having problems in paying their credit card balance, we will help them through agencies such as the Credit Counselling and Debt Management Agency (AKPK),” he said, adding that many credit card users had sought AKPK’s assistance.