Unpaid Credit Card Balances Will Soon Incur Interest On Finance Charges Too
Author Avatar

 

Unpaid Credit Card Balances Will Soon Incur Interest On Finance Charges Too

Over the last month, various banks have been announcing changes to their terms and conditions regarding cardholder finance charges. Soon, unpaid balances will accrue interest on finance charges and other fees as well – not just the outstanding balances arising from retail transactions and cash advances.

Although Bank Negara Malaysia has not released any public statements on this, the fact that all the banks are amending their finance charges at the same time strongly suggests that the central bank has made some sort of directive on this.

Previously, interest would only be applied to the unpaid balance that consisted of retail transactions and cash advances. Under the new terms, the finance charges will be applied to all unpaid balances, including finance charges and fees (except late payment charges, which is a charge incurred when you fail to pay the minimum monthly payment on time).

So, if you don’t pay up on time, even the interest charges and annual fees will incur interest until full payment is made. That means cardholders who do not pay their statement balance in full will now be paying more in interest charges than they did before.

A sample illustration provided alongside the banks’ announcements.

Below are some of the banks who have announced amendments to their financing charges and when the changes come into effect.

Bank In effect from
Citibank 27 July
CIMB 1 August
Hong Leong Bank 6 August
RHB 19 August
UOB 19 August
Standard Chartered 23 August
AEON 2 October
Public Bank 2 October
AmBank 2 October

As finance charges are only applied to those who do not pay their full statement balance before the due date, the new charging structure will not affect those who pay their credit card bills in full within the 20-day interest-free period. According to the banks, the change is being made to encourage cardholders to make full payment of their current balances by the due date.

For more information, check your respective bank’s credit cardholder terms and conditions and look for the clauses pertaining to financing charges.

 

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Top Banking Articles
Post Image
Best Fixed Deposit Accounts In Malaysia – October 2021
The RinggitPlus Team
- 1st October 2021
We provide monthly updates on the best fixed deposit rates in Malaysia with tables showing the top 5 rates for the duration of 1, 3, 6, 9, and 12 months.
Post Image
Best High Interest Savings Accounts In Malaysia (October 2021)
Pang Tun Yau
- 6th October 2021
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!
Post Image
Malaysian Banks And Local Institutions Offer Financial Assistance For Customers Affected By Covid-19
Alex Cheong Pui Yin
- 1st April 2020
(Last update: 1 April 2020, 3.40pm to include FAQs by banks.) With Malaysia going into an extended period […]
Post Image
Free Digital Tools to Help Market Your SME Business
Ahmad Mudhakkir
- 2nd July 2018
If you want to make sure other people know about your business, here are the free digital tools that can help you do it!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image