Oct 23, 2009

Is credit card the new sin?

My House
boy! my house gets something in the budget.

From the budget:

A SERVICE tax of RM50 will be imposed on each principal credit card every year beginning Jan 1.

For every supplementary card, a RM25 service tax will be charged yearly.

The move to impose this tax is to promote prudent spending as the use of credit cards is extensive. The number of cards increased from two million in 1997 to 11 million as of August this year. They exclude the 285,000 charge cards already issued.

Muslim Consumer Association of Malaysia secretary-general Datuk Dr Ma’amor Osman said it would encourage consumers to limit the number of credit cards they hold.

This is a personal blog.

Budget 2009 is a national thing.

But it can be pretty personal, at times.

Unlike budget of the yesteryears, in the midst of crisis, some decisions can be pretty important. Though, some decisions can be just as petty and unimportant, yet manage to hog the limelight.

It is just like a cartoon strip of Dilbert that was to me, rather amusing.

It was the boss, upon discovering the global economic on the recovery track and quickly send out memo to ask all employees to wear mickey mouse nose to work. And all the employees started praising the boss for such a ‘creative’ method of stimulating the economy.

Main thing on everyone’s mind is about the taxes. Just like how in the fairy tales of olden days, when the king would stand out of the balcony of the tall huge castle and just after the trumpets alerted all his people, his loyal servant would shout “Hear ye, hear ye, the tax raise/reduce by x numbers of gold/silver (or whatever currency)”.

If one is myopic enough, one will prematurely hold themselves in a joyous mood as numero uno announced the tax reduction and rebates with a smirk on his face.

The endorphin rush proves to be just temporary as the new (correct me if I am wrong) tax on credit card was served up on the table.

Previously, we have what we called as ‘sin’ taxes, where usage of alcohol and cigarettes are indirectly discouraged through the increase of their price indirectly through the increase in tax. It is something that those who shun those substances would cheer about. But then again, how far it really crunches down the number of alcohol or cigarettes sales or how far it has deter people from ‘sinning’ is something else to ponder upon. If it backfired, probably it is creating a chain reaction of sinners creating more sins to gather enough wealth to support those sinful activities.

But this year, there are no sin taxes, except for credit card taxation.

Smoke Kills

sin tax. it is a sin to own to many credit cards

Is credit card the new sin?

Come to think about it. Having a credit card and using it every times, we’re creating mini debt. And by owning multiple credit cards, it is like having debts all around us. A familiar phrase comes to mind – kad kredit keliling pinggang, hutang keliling pinggang.

Then, comes the 2nd question.

Why Bank Negara did not stop the issuance of the astronomical numbers credit cards in the first place, when they have perfect autonomy to do so, rather than making us cancel now by imposing taxes?

If you go shopping in the mall, or go to Tesco, or any public places, I am sure you’ll see armies of credit card sales people, from different banks, offering different types of free gifts and wearing attires of different level of sexiness.

And the application process is faster than passing a toll with Touch n’ Go. OK, I am exaggerating. Nevertheless, it is really easy. Photocopy IC, previous credit cards, fill few particulars – you’re done. Almost like the Drive-through McD.

Some people may be wondering. The economy is bad. Everyone is saving up the bucks.

Why do banks want to keep giving people loan in the form of credit cards?

Alright, before the 2nd question is over, another question arises pulak.

First, we must understand the reason behind our economic crisis. Actually, we don’t have one. The US has it, therefore as trade partners or simply being in the same earth and all the borderless shit trading, our country suffers some collateral damage. The main problem in US is the big companies, giving out too many big housing loans and majority of the house owners default those loans, ending with those financial institutes holding up only worthless rows of houses.

Not wanting to be end up like the US, housing or corporate loans are being given out only with extreme caution or strict criteria. This means less business for the bank.

Therefore, the other way for the bank to cari makan is through credit cards.

A bit, a bit from a lot, a lot of people remain a very profitable business.

There are several reasons why one would want to have a credit card, or in this generation, few credit cards.

Unlike olden days, credit cards are markers of high status. Everyone around you look at you like you’re a walking beefcake, selected target for robbery. They know you’re rich. Some say, the more credit cards you have, the more wind you have blowing behind you.

Now, it is a norm. And only an idiotic moronic burglar would mug you because those cards can be cancelled instantaneously (1 phone call away) and with the credit cards, you’re definitely not obliged to carry your whole bank account cash with you wherever you go.

In addition, the latest trend, the credit card seconds as loyalty card, promising rebates after rebates. Hence, one pays less with cards, pays more with cash. Shell, Giant, Tesco – just to name some of the giants associated with credit cards promoting smart consumerism.

Not only that, furnitures, electric appliances, electronic equipments, jewellery, gadgets and etc can be paid in installment with discount or zero interest through cards.

To the middle class, paying in full can be easily done. But lower income group with liabilities all around, at times, depends on the cards, to get necessary furnitures or appliances.

What’s more, credit card also seconds as bait. Yes, bait.

Now that 11million credit cards is finally out, it is time to tax each of them.

Like I said, a bit, a bit from a lot, a lot of people remain a very profitable scamming of the rakyat.

Make Road

making highways into the pockets and purses of rakyat.

The astronomical increase in numbers of credit cards being issued doesn’t equal to bad credit management of the rakyat.

Besides, I really don’t see how adding another nominal fee to it would make it any better. Yes, I can cancel my cards to avoid paying them, but what about people, in the midst of their installment of their refrigerator, washing machine and other appliances.

Sudah berhutang kepada bank, sekarang kena berhutang kepada kerajaan.

(insert your favourite foul language, here), right?

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