By YENG AI CHUN and SHAMINI ANN
newsdesk@thestar.com.my
KUALA
LUMPUR: With millions of customers pondering if they should snip their
credit cards to evade the Government’s newly-introduced RM50 service
tax, banks are engaged in a “plastic war” to retain their share of the
market.
Tempting offers are being made to cardholders, in the
form of innovative loans, easy cash and balance transfers, to keep them
“tied.”
Bank officials told The Star that the credit card issue was at the top of the agenda during daily meetings.
“Credit cards offer banks a mass market and it is important that the correct strategies are devised to keep our customers.
“As
it is now, it’s getting super hard to sign up new customers as the
market is already saturated,’’ said one bank manager based in a local
bank here.
Another senior bank manager, who declined to be
named, said there were banks which were even offering zero-interest
balance transfers for up to a year – but with a catch.
“One
bank’s requirement is for the cardholder to spend at least RM300 a
month using the credit card. “The cardholder benefits and at the same
time, the bank makes money from the additional swipings,’’ he said.
One cardholder, who wanted to be called Raj, said he was surprised to receive a cheque for RM10,000 in his name recently.
“The
bank wrote to me saying I could use the cash any way I wanted. I was so
tempted until I read the fine print which stated that the interest rate
was 18%!,’’ he added.
Writer P.B. Cheong, 30, said he cancelled four credit cards at the start of the year.
“Once
you get caught in the credit circle, it is very hard to get out. It is
not how many cards you have that matters but how you use it,” said
Cheong who chalked up a debt of RM30,000 at one time.
Finance
manager Angeline Goh, 29, said she received many calls from banks and
agents offering credit card balance transfers at a lower interest and
even personal loans.
“It’s normal to apply for one credit card
from the bank but they end up offering you two credit cards – a Visa
and Mastercard, she said.
Deputy Finance Minister Datuk Chor
Chee Heung, when contacted, said it was understandable that the banks
were coming up with more incentives and plans to retain their credit
card base.
He said some banks have created a system with points used to redeem the RM50 service tax.
Fomca
secretary-general Muham-mad Sha’ani Abdullah said banks would offer
various “baits” or incentives to retain their customers.
“Banks
should be more prudent as to whom they issue credit cards. Otherwise,
they would just be getting people into deeper debt because many do not
understand the pitfalls of having a credit card,” he said.
Source
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