Financial Management


A credit card is a bit like a chain saw, it’s a very handy tool, but it’s capable of inflicting horrendous damage if used improperly. The same advice applies to both of them – choose the right tool for the job, and follow the safety rules.

With the newly imposed credit card tax by the government, here are a few things to consider before you select a credit card:

Spending habits

The first question to be answered is how you intend to use the card. Are you the kind of person who will pay off the card every month without fail, or do you anticipate carrying a balance from month to month? Are you going to use it to pay for everything, or just for emergencies?

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budget

On 23rd October 2009, Prime Minister Datuk Seri Najib Tun Razak has tabled Budget 2010 with the theme “1Malaysia, Together We Prosper”.

These are the main highlights that interest me in the area of Personal Finance

  • 5% property gain tax will be imposed on gains from the disposal of real property from Jan 1, 2010. Existing tax exemption will be retained for gifts between parent-child, husband-wife, grandparent-grandchild.
  • A service charge of RM50 a year to be imposed on each principal credit card and charge card and RM25 a year on each supplementary card including those with free for life effective from Jan 1, 2010.

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debt

Why it’s not always cost efficient to use personal loan to clear credit card debt

The subject matter has become a common scenario among credit card debtors. Taking a personal loan to settle credit card sales method has also been adopted by banks in pushing their personal loan product. But is that wise? Key question – is the total sum paid to settle the personal loan actually less than the sum which would otherwise be paid to settle the credit card debts?

For that, a few factors need to considered. Firstly, the tenor; while credit cards have an indefinite tenor with a minimum of 5% of outstanding balance to be paid, a personal loan offers a range of between 1-7 years for repayment. This sounds better. Secondly, and more importantly, what is the actual annual interest rate of the personal loan (which differs from the nominal fixed rate quoted for personal loan) as compared to the annual interest rate of the credit card, which is about 18%?

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financial mediation bureau

The Financial Mediation Bureau (FMB) is an independent body set up by Bank Negara Malaysia to help to settle disputes between individual and their financial services providers who are its members.

Currently FMB members are Commercial Banks, Investment Banks, Islamic Banks, Insurance Companies, Takaful Operators, Development Financial Institutions, Payment System Operators and Payment Instrument Issuers.

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