How to Cancel a Credit Card | Do It the Right Way
Since there is No Update on the RM50 service tax on each principal credit card, charge cards, including free cards and RM25 for supplementary cards by January next year, it is a Good and Ideal time to cancel your credit cards or charge cards and every supplementary card.
I am sure many of you are thinking now how to cancel your credit cards or charge cards.
This is to avoid unnecessary extra charges on credit cards.
Government urged to withdraw service tax on credit cards
Credit card agents want the government to reconsider withdrawing or deferring the service tax on credit cards.
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Before you cancel the credit card, you need to consider:
1) How many credit card do you want to maintain?
2) Which of your existing credit cards to Cancel?
3) How to settle the outstanding of the card’s balance?
*** You cannot cancel the credit card if you have NOT paid off the balance in full. (No outstanding balances)
There is always a right way and a wrong way to do things, and that goes for canceling a credit card.
How to Cancel a Credit Card by Do It the Right Way
1) Redeem all your credit card reward points.
Do take note on the Reward Redemption period as some reward items maybe not available to match your reward points.
2) Cancel all your Auto Debit instructions via writing
Notify all the Utility Companies or Insurances company (TMNet, Great Eastern, AIA, Maxis, Astro etc) to cancel all the auto debit instructions, if any.
3) Write a Cancellation Letter
You can always fax the Cancellation Letter instead of Posting via Mail.
Please call your relevant banks for the correct Fax numbers.
4) Follow-up on the cancellation
Always insist to get a confirmation of the credit card Cancellation in writing from the banks.
Never assume your credit card Cancellation is successful without it!
Normally, after you send in the credit card Cancellation Letter, the Credit Cards Customer Retention department staff, would call and ask you to retain the credit card.
Thanks for the tips!
RM50 credit card service tax should not be a ‘plastic hungry’ move
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THE debate over the RM50 credit card service tax rages on even as the banking sector is urging the Government to reconsider the industry’s proposal to exclude corporate cards and impose the tax on per customer instead of per card basis.
Corporate cards are used for ease of transactions and cashflow management; executives have less forms to fill and in this context, it is a step towards improving productivity.
“If the objective of imposing the service tax is to prevent individuals from misusing credit, why are cards used by corporates also taxed? That will not only increase the cost of doing business but also send a potentially wrong message that companies can get penalised for being efficient,’’ Citibank Malaysia CEO Sanjeev Nanavati said in response to queries from StarBiz.
“This is not a small, localised issue,’’ he added. “People are going to view this as one of the implications of doing business in Malaysia.’’
Imposing service tax on per card basis is also a wrong move as spending power should not be gauged by the number of plastics held but on the total amount of credit available.
“A lot of people spend prudently and have multiple cards for the value they see in them,’’ said Sanjeev. “Taxing them on each card they hold has the effect of taking away some of the value they are receiving from these cards. Furthermore, banks impose a credit limit across multiple cards. So having more cards with the same bank does not mean you can spend more.’’
There is no serious personal debt problem in Malaysia and hence, no urgent need to clamp down on the usage of the cards. In a truly cashless society, people use cards as a matter of convenience and that could be for small amounts.
Those who had spent many hours devising ways to encourage cashless transactions must be scratching their heads at this “brilliant’’ move to tap into their success in generating the volume and usage of cards.
In the name of consolidation, the Government’s move to slap a RM50 service tax is viewed as a step backwards and too high an amount despite top officials’ assertion that it is “no big deal.’’
A RM10 or RM20 tax would be more palatable while passing on the message of prudence.
Even though the budget announcement says the tax is effective from Jan 1 next year, it may not necessarily mean that it is collected all at once.
A better time would be when the card comes up for annual review, which may be a few years from the expiry. Banks do their internal reviews annually when they decide on the card fees to be charged or waived for the following year of usage.
By stretching that period till December next year, banks may get to retain their card users a bit longer although a 20%-30% cancellation rate is expected.
With just a month towards Jan 1, there is not much time for card users to arrange for cancellations especially when they have to wait for their latest statements to make the last payments.
A decision must be announced soon on what is really going to happen.
* Senior business editor Yap Leng Kuen hears rumblings even among foreigners on the card service tax and how it appears contrary to the Government’s aim to increase private consumption. As a rule of thumb, industry consultation is always advisable for smooth and targeted implementation of any measures.
from: biz.thestar.com.my/news/story.asp?file=/2009/11/25/business/5177037&sec=business
Charge the banks, not us
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IT SOUNDS to me that the government is dead set on imposing the RM50 service charge on credit cards. The PM-cum-finance minister has been reported as asking us to accept it for the overall good of the budget and economy.
I think that is the reason that is closest to home – not any of the declared reasons for helping Malaysians to be more prudent financially and not overextend their use of credit cards.
Why? Because, if the government is truly concerned about credit card misuse, it should look at the banks. They are the ones throwing the cards at us – can you walk through a shopping mall concourse area without being mobbed to get a new card? They even send us cheques for sums of RM5,000 or more as ready loans to be paid via monthly credit card instalments.
They keep increasing our credit limit just to tempt us to spend more and hopefully go into debt. They are inculcating the spend-on-credit mentality and culture. (Where is Bank Negara in all this?) I would propose that the new service fee be charged to banks and not credit cardholders. That would hopefully make banks more responsible.
Otherwise, I would have to hold on to my opinion that the service charge is a new revenue generator. Can the PM please tell the public how much instant cash this ingenious charge will add to government coffers?
Lim Swee Bin via email
from:sun2surf.com/article.cfm?id=40688
Why punish the good paymaster?
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WITH reference to “Credit card tax to encourage prudent spending” (Nov 24), I have been practising self-control since I first got my credit cards a long time ago.
Why punish me for the folly and recklessness of others? I own only two cards – a Mastercard and a Visa. Both come with an annual fee for which I enjoy a waiver if I spend a minimum stipulated sum a year. This sum is both reasonable and achievable through daily expenses like petrol, groceries, and at times eating out.
With the cards, I see no reason to carry much cash. I plan my expenses properly, i.e. spend only what I can afford. When my bills come, I pay the banks in full and don’t take advantage of the minimum payment. Being a good paymaster, my minimum allowable credit has been raised. I have never, however, used this facility.
The people who should be made to pay a service tax of RM50 are the ones who abuse the facilities. I know of people who advance money using their credit cards to gamble. There is one who owns 10 cards, advances RM2,000 from each – totalling RM20,000 – and then pays the minimum sum a month! Well, that’s 10 months’ gaji in advance!
Often, they refuse to pay, knowing banks cannot sue them for bankruptcy when the sum owed does not exceed RM10,000. What a way to get a loan!
Credit card companies should limit the number of cards issued to one person according to monthly income, expenditure, repayment and outstanding debt. A combined database of card companies would be a useful tool to weed out the poor paymasters. Default on one card should automatically render the other cards unuseable.
So dear government, why punish me?
Stanley Teoh, Petaling Jaya
from:sun2surf.com/article.cfm?id=40696
i usually call to the bank to cancel my credit card. the only way can keep the credit card myself.. haha… but must call back to confirm after 1 week to make sure credit card are cancelled successful. 🙂
good tips alan!
my friend told me that almost 30+ credit card cancellations occurred at a particular citibank branch daily.
Credit card income to remain intact
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RM50 service tax unlikely to affect cardholders’ overall transaction value
PETALING JAYA: Income from the credit card business is unlikely to be dented by the imposition of RM50 service tax per credit card effective Jan 1, said industry players and observers.
Malaysian Rating Corp Bhd vice-president and head of financial institution ratings Anandakumar Jegarasasingam said he did not expect the transaction value generated by cardholders, which in turn translated into income for banks, to be significantly impacted by the credit card tax.
“Most cardholders are normally prudent and spend within their financial means, and hence they will limit their spending to one or two cards.
“Therefore, the overall transaction value generated by cardholders will remain largely intact and the main source of income for the card issuers (for example, the merchant fees and interest income on outstanding balances) is unlikely to be significantly affected,” he said.
Meanwhile, RAM Holdings Bhd economist Tng Boon Hwa concurred that the service charge tax was unlikely to lead to an appreciable loss in the credit card business at the aggregate level.
“The average credit cardholder charges RM5,000-RM6,000 per year on his credit card. The RM50 service charge tax is therefore only a small percentage, less than 1%, of the total expenditure per card,” he said.
He did not anticipate the higher cost of holding a credit card to prompt individuals to take on more personal loans because the reasons for taking a personal loan were distinct from those for holding a credit card.
“Personal loans are usually obtained to finance purchases of durable goods such as a car or a house, or as capital to start a small business. Credit cards, on the other hand, are often used to purchase comparatively cheaper items such as necessities (for example, groceries and petrol), retail shopping and increasingly, online purchases,” Tng added.
Anandakumar said the general growth momentum of personal loans was likely to be determined by the competitive pressure among banks, the economic recovery as well as the improvement in consumer sentiments and not because of the potential drop in demand for credit cards due to the service tax imposition.
“Hence, we do not expect personal loans to evolve into a replacement for credit cards,” he told StarBiz.
From a revenue standpoint, he said that card issuers earned mainly from merchant fees when the cards were used and through interest income on outstanding balances.
“In the case of personal loans, the earnings would be from interest on funds lent, which are often at a lower rate than what is levied on outstanding credit card balances. Thus, even if the banks were to promote personal loans, they would not be able to make as much as they would from credit cards through interest income and merchant fees,” he added.
In terms of risks involved, Anandakumar noted that personal loans were granted after a credit assessment of the borrower, with the purpose of the facility often being vetted by the bank.
“However, in the case of credit cards, after the card has been issued, the bank has little or no control on how the cardholder uses the credit available to him. Hence, theoretically personal loans should be less risky for the bank to hold,” he said.
However, according to Bank Negara data, non-performing loan ratio for loans granted for personal use (4.4% at end-September 2009) was higher than that for credit card advances (2.5% at end-September 2009).
“This does not augur well for the consumer credit origination and risk management standards of Malaysian banks,” Anandakumar added.
from:biz.thestar.com.my/news/story.asp?file=/2009/12/3/business/5211306&sec=business
Tax on credit cards a burden
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I FULLY agree with Blurkid84 regarding the imposition of the RM50 service tax from January 2010.
In asking why the rakyat could not pay a mere RM50 despite the benefit obtained from the on per cent reduction in income tax, the Prime Minister has forgetten that the 1% reduction only benefits people in the higher income bracket while the RM50 service tax adversely affects everyone regardless of income bracket.
The RM50 tax would therefore burden those who do not benefit from the one per cent reduction.
If the Government’s objective is to discourage undisciplined spending with credit cards, increasing the minimum eligibility income would be more effective. If it is to discourage people from having too many credit cards, perhaps the Government could impose the service tax from the second card onwards.
I hope the Prime Minister will give some consideration to the above issues.
JEFFREY LOH, Penang.
from:thestar.com.my/news/story.asp?file=/2009/12/4/focus/5235047&sec=focus
You can cancel OCBC credit card via phone. So much hassle free
No letter is required.
Within two weeks times, OCBC will send you a acknowledgment of the Cancellation of the credit card.
We were your age once
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THERE was moaning and groaning among the senior citizens over the imposition of RM50 for credit cards, re-imposition of RPGT, 15-year end-of-life for cars, the proposed GST and other issues of cost that will affect them brought about by the recent Budget announcement.
While some readers are quite sympathetic to the plight of seniors, others prefer to offer suggestions, such as asking them to understand that money is reward for work done.
You do no work, you get no pay, you deserve no assistance from the Government. Or summon your children, it is payback time for them to look after you.
Alternatively, pray for divine intervention if their children cannot or refuse to help them.
I wonder whether this is too simplistic a view.
Approximately, as Pareto Rule claims, 80% of wealth is produced by 20% of the population. Approximately 3 million Malaysians are senior citizens.
Thus, 20% of them do not need any help – the entrepreneurs, ex-senior executives in the private sector, etc (i.e. those who had made it through their abilities, skills, luck, good contacts, etc).
They are well-off. They do not need to moan and groan when new taxes are introduced. They live comfortable lives, no worries over medical bill, no worries over indulging in some luxury, can afford anything or everything they need and possibly want.
What about the rest? Many white collar workers tried to continue to work, accepting lower positions, lower pay, no perks until they cannot find any work or became physically and mentally unfit to work.
Then they stop and live on their savings, partially, in some cases, supplemented by their children.
What about the retired blue collar workers? The daily wage workers? The self-employed? Some who during their whole working lives could barely make ends meet?
A construction worker has to stop work when he cannot carry bricks the whole day long; the hawker has to stop when he cannot cook or wash dishes; the bus driver has to stop when his eyesight starts failing and legs become weakened; the rubber tapper has to stop when he cannot cover 1.2ha every morning; so have the postman, meter reader, fishmonger, padi planter, shop assistant, taxi driver and more when physical conditions and mental faculties cannot permit.
They become retirees. What do they live on?
Again, Pareto, 20% will have the resources to keep their bodies and souls together on their own. Let us say, half of the balance will have children who have done well enough to be able to support ageing parents.
What about the balance of 40%? Their children who are working can just barely make ends meet, have their own commitments, or families to look after, etc and can barely give a small allowance to their ageing parents. Do they pray for divine intervention? Or manna from heaven?
The bulk of seniors, except the 20% who had made it, are alarmed that while goodies were dished out to those who are gainfully employed, the Budget gives them nothing but takes away part of their savings, at a time when they cannot work.
If the Budget cannot give any goodies to the seniors, what we are asking is, do not take away part of our savings, make life more difficult that it is. (I must record here that we appreciate the removal of the 15-year end-of-life for cars proposal.)
We helplessly watch as the Budget takes away our savings, bit by bit.
Eighty percent of approximately 3 million seniors is over 2 million, a lot of people in dire straits. Do we allow the Budget to punish these people at a time when they are most vulnerable or going to be most vulnerable?
To your more prolific writers, we say please do some segmentation and study specific groups’ characteristics before taking a broad swipe at a so-called group that is not really homogeneous.
We were your age once. We were also narrow in our range of thinking once. We had simplistic views once. We also lectured our elders and parents once upon a time.
Well, take this advice or we will have to pray for all of your generation to be wise, mature, caring, understanding and all the other good qualities a human being needs to have.
A SENIOR CITIZEN,
Ampang.
from:thestar.com.my/news/story.asp?file=/2009/12/14/focus/5295591&sec=focus
Guidelines on credit card service tax issued
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The Association of Banks in Malaysia (ABM) said today it has been extended a copy of the guidelines issued by the Ministry of Finance on the imposition of a service tax of RM50 a year on each principal credit card and charge card, and a service tax of RM25 a year on each supplementary card effective Jan 1, 2010 as announced in the 2010 Budget speech.
In a statement today, ABM said the service tax would be collected by banks and other card issuers from credit and charge cardholders, and paid to the director-general of Customs and Excise. “In this respect, the amount of service tax payable will be set out in the cardholders’ monthly statement separately,” it said.
ABM said banks and other card issuers were allowed to enter into arrangements where cardholders may apply redemption/reward points or rebates they earned through using their cards for the payment of the service tax. It said service tax became chargeable at the time when the credit card or charge card was issued, on the anniversary date or upon renewal. The following are examples on when service tax would be chargeable:
Example 1: Case of a new credit card or charge card issued which is valid for one year
Say, a credit card or charge card is issued to a new cardholder on Jan 10, 2010 with a validity period of one year expiring on Jan 9, 2011. A service tax of RM50 would be chargeable on Jan 10, 2010, the date of issue of the card.
Example 2: Case of a new credit card or charge card issued which is valid for five years
Say, a credit card or charge card is issued to a new cardholder on March 8, 2010 with a validity period of five years expiring on March 7, 2015.
A service tax of RM50 would be chargeable on March 8, 2010, the date of issue of the card and on every subsequent anniversary date, March 8, 2011; March 8, 2012; March 8, 2013 and March 8, 2014.
Example 3: Case of existing credit card or charge card which is valid for five years
Say, an existing cardholder has a card that was issued to him on May 18, 2008 with a validity period of five years expiring on May 17, 2013. No service tax would be chargeable on its anniversary date May 18, 2009 in view of the fact that imposition of service tax will only be effective Jan 1, 2010. A service tax of RM50 will however be chargeable respectively on May 18, 2010; May 18, 2011 and May 18, 2012.
The following cards do not fall under the purview of the imposition of service tax:
• Debit cards
• Petrol cards (cards issued by petrol companies such as FleetCard and Smart Pay)
• Closed community charge cards used at work places, schools and clubs only
• Loyalty cards (such as Bonus Link)
• E-money (such as Touch n’ Go)
Service tax will not be charged for replacement cards issued in connection to lost or spoilt cards or fraud.
In the event a credit card or charge card is upgraded (such as in the case of a Classic card to a Gold card) or downgraded (such as in the case of a Gold card to a Classic card) or converted (such as in the case of an Islamic card to a conventional card, or a co-branded card to a generic card, or vice versa) or reinstated (such as in the case of a cancelled card), service tax will be charged in respect of the new cards issued unless the anniversary dates of the previous and the new cards are the same.
from:theedgemalaysia.com/business-news/156404-guidelines-on-credit-card-service-tax-issued.html
Service tax on credit cards takes effect
AS a card credit holder, JACOB of Klang is wondering when banks in Malaysia will release its official notification on the government’s new RM50 service tax on credit cards.
“Banks which issue credit cards are telling customers that there is still no official notification yet on whether the government’s service tax is in operation,” he says.
“All those with several credit cards would like to know early as some would surely want to terminate some of their credit cards.”
● When contacted, the Ministry of Finance’s deputy undersecretary in the Tax Analysis Division, Gunaseelan Kunjan, says: “I have communicated with JACOB via his mobile phone and explained to him about the imposition of service tax on credit cards from this year. There was a delay in informing the banks about the details of the taxation due to a delay in the gazetting of the Service Tax Regulations 1975.”
fr:mmail.com.my/content/26334-service-tax-credit-cards-takes-effect