Credit Card Service Tax – How to save that RM50 every year
As we’re all too aware, uncontrolled credit card spending is the fast track to financial disaster. To encourage financial prudence, Bank Negara has rightly imposed a RM50 and RM25 service tax on all principal and supplementary credit cards respectively from the 1st January 2010.
This new service tax did a great job of making Malaysians think twice before applying for a new card. Luckily for us the banks have come up with lots of ways to help us pay the service tax. The RinggitPlus team has done the research to help you save that RM50 annual credit card service tax.
New Credit Card Application Promotions
Several banks offer new customers a RM50 application bonus for principal card holders and a RM25 application bonus for supplementary card holders. Here are a few current examples:
|RM50 cashback rebate for new principal card holders||Make at least three purchases of any amount with new credit card within 60 days of approval date|
|Wise Credit Card||RM50 cashback rebate||N/A|
UOB Preferred Platinum, UOB Lady’s Card, UOB ONE, UOB Vox
|RM50 and RM25 cashback rebate for new principal and supplementary card holders||Principal card: minimum of three retail transactions|
Supplementary Card: swipe a minimum of one retail transaction within sixty days of card approval date
|RM50 and RM25 cashback rebate for new principal and supplementary card holders||Spend RM300 on retail transactions OR make five transactions of any amount OR perform a Balance Transfer within three months from card issuance|
Two Credit Cards, One Service Tax
Some banks are offering a two for one deal on the service tax when you apply for a certain pair of new credit cards. Here are some examples:
Hong Leong Combo Programme
|New customers who successfully apply for selected pairs of credits cards will enjoy a 100% waiver of all service tax in the first year. In subsequent years Hong Leong will absorb the RM50 principal service tax for one card.||Swipe the new card within 45 days of approval|
Maybankard 2 Platinum and Gold Cards
|You get two credit cards, one Mastercard and on American Express, but you only pay service tax on one of them.|
Annual Usage Bonus
OCBC and Affin Bank offer annual cashback rebates of RM50 and RM25 for principal and supplementary credit card holders. Affin Bank credit card holders have to spend RM5,000 a year while OCBC principal and supplementary credit card holders have to spend RM10,000 and RM5,000 a year to qualify for the cashback rebate.
Almost all banks give credit card holders the option to use reward points to pay the annual service tax. BSN even offers new principal card holders 8,000 rewards points and supplementary cardholders 4,000 reward points, which can be redeemed against the tax. The new credit card holder just needs to make one transaction within 60 days of the card issuance date to receive the reward points.
Not So Taxing After All
As you can see there are many ways the banks are helping their credit card holders pay for the annual service tax. If your bank is not listed in this article you should still call their call center or ask at your local branch about how you avoid the service tax. In our research we found some banks offer RM50 and RM25 annual usage bonuses which are not advertised. Happy service tax saving from the RinggitPlus team.