Budget 2010: Goodbye credit cards

The Finance Ministry has claimed that the government is concerned about credit card debt, and we should be. But to quote a blogger, Lee Wee Tak: “If you want to control credit card debts, more effective measures would be to impose stricter guidelines on qualification, credit limits of cardholders and limit the number of cards held. Not by increasing the financial burden of all cardholders, whether they are having a debt problem or not.”

By Tony Pua, The Nut Graph

I MUST say that Budget 2010, announced by Datuk Seri Najib Razak on 23 Oct 2009, contained quite a few surprises for better or for worse. And my observation is from someone who has poured through the government’s budget over the past five years.

For one, I’ll have to start picking up the phone over the next few weeks to cancel my many credit cards. An unwelcome announcement was that beginning 1 Jan 2010, we will be taxed for every card we own, regardless of whether we are or aren’t in debt. 

At RM50 per card, and RM25 per supplementary card, that’s probably enough to set me back at least RM700 per annum. Yes, I have indeed a whole string of credit cards, but thankfully without any debt attached to them.

I have had multiple credit cards since the days of running my own company. Trust me, they served me well as my short-term “Ah Long”. In times of crisis, such as the Asian financial crisis in the late 1990s, I dipped into them to pay my employees their salaries. It was an expensive loan, but it served as a reliable last resort and tided me over during the tough times. You can imagine how much time I spent filling and faxing “interest-free balance transfer” applications!

Such days are long gone, as I no longer have scores of employees to support. But I kept my cards, cancelled some and applied for new ones for different reasons. You see, I’m a sucker for ensuring I get the best deals. And now that retail outlets and services are literally embedded into credit cards, you want to own them just to make sure you enjoy maximum discounts or cash rebates. I’m sure the missus enjoys having the supplementary cards as well.

READ MORE HERE: http://www.thenutgraph.com/