This scheme is designed to reward prompt paying customers with a lower interest rate. Instead of the flat rate of 18% per annum (1.5% monthly) charges, two additional rates are being introduced.
- 15% (p.a.) or 1.25% (monthly) for all the 12 consecutive months of prompt payment in the past 12 months.
- 17% (p.a.) or 1.42% (monthly) for 10 or 11 months of prompt payment in the past 12 months
- 18% (p.a.) or 1.50% (monthly) for less than 10 months of prompt payment in the last 12 months.
This scheme will be implemented from 1 July 2008 onwards by all the banks in Malaysia.
I believe this is a good move by the Bank Negara Malaysia as the number of credit card debt is increasing for the past few years. Such initiatives will helps to motivate the card members to pay promptly to enjoy the lower interest rate. It would be sweeter if the rate can be lowered in the future.