By JOSEPH LOH and HARIATI AZIZAN
PETALING
JAYA: Calls to customer care lines of all credit card issuers revealed
issuers will not subsidise the RM50 service tax for credit card that
came into effect on Jan 1 this year. Most credit card issuers, when
contacted, declined to comment on the service tax issue.
With
the exception of Bank Kerjasama Rakyat Malaysia, which unconditionally
subsidises the service tax, all credit card issuers impose specific
conditions upon customers in order to offset the amount. (see graphic)
Most
credit card issuers allow the amount to be offset with the cardholders’
reward points earned. However, the amount of points required to offset
the RM50 is usually lower than a department store shopping voucher
redemption of similar value.
Another
mechanism offered is a RM50 cash rebate specifically tackling the
service tax amount. It requires cardholders to utilise their cards –
usually with a minimum value on transactions – to be entitled to the
rebate.
According to a statement from Aeon Credit Service (M),
the company has yet to see any behavioural change in card members after
the announcement of the service tax.
“Our credit card members’
recruitment has not been slowing down and we are still receiving
encouraging number of applications despite the fact that new applicants
are aware of the service tax imposed.
“In principle, the service
tax is to be paid by cardholder, who may also utilise reward points
earned from using the card for the purpose,” the statement said.
Many credit cardholders have already started cancelling their surplus credit cards.
In
his blog, PJ Utara MP Tony Pua wrote that he made his choice for what
to snip and what to keep based on the best cash rebate and reward point
deals.
Cash rebates is better than card reward points, he wrote,
but do read the fine print before deciding. Although many credit cards
offer “up to” 2% cashback, he noted, “You’ll only enjoy 2% cash back
for monthly purchases in excess of say RM6,000. Otherwise, for
expenditure below that, you’ll only get cashback of not more than 0.5%.”
He said to enjoy some cash rebates, card holders may have to forward balances and end up paying high interests.
For reward points, he advised, look out for the card that offers the least amount of points to convert to a particular reward.
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