Starting from 1st July, 2008, credit card holders in Malaysia who pay only partial of their balance instead the full payment will no longer enjoy the 20-days interest free on new retail purchasing.
The move initiated by Bank Negara Malaysia aims to promote prudent spending and good financial discipline. Those who pays in full will be able to enjoy the 20-days interest free facilities.
At the same time, new interest rate tier also come into effect 1st July 2008, as to encourage more card holders to pay on time. More than 50% of the card holders are just paying the minimum or partial of their balance.
The move to do away with the 20-days interest free will in a way increase the finance (interest) rate for those who are paying the partial amount of their balance. Given the alarming development on the credit card debts, it may make the life of those already at the brink of bankruptcy become harder to service their balance. On the other hand, it helps to educate the public to spend wisely and manage their finance with higher discipline.