Malaysians generally prudent with credit card spending
BY LAM LIPETALING JAYA: Malaysians are generally efficient in repaying their credit card bills although purchases via plastic have grown by some 450% in just a decade.
Based on statistics released by Bank Negara, the accumulated credit card debt as of August stood at some RM13bil.
With some six million principal and supplementary cards in circulation, each card has an average debt of some RM2,000.
A Bank Negara spokesman pointed out that a majority or RM11.5bil in debts was current and only 4% or RM548.8mil had not been settled for more than three months, thus becoming non-performing loans.
“This means that more than 87% paid their outstanding balances on time within a month – or at least the minimum 5% of the total balance occurred at the end of each month,” said the spokesman.
Despite international market researchers describing the country's credit card industry as still in its infancy, transaction volumes in Malaysia had increased from a mere RM2.4bil a year in 1994 to over RM29.4bil last year.
Mastercard International Malaysia and Brunei country manager Jim Cheah said the jump was partly due to more businesses accepting credit cards and a change in lifestyle, adding that Malaysians generally proved to be prudent consumers.
“10 years ago, card holders normally use it for travelling and entertainment spending or cash advances, especially during business trips abroad.
“Today, the spending patterns have changed as a large volume of transactions are for daily purchases, such as grocery shopping and fuel,” he said.
Consumers Association of Penang (CAP) was sceptical that Malaysians were prudent with their credit card spending.
Its president S.M. Mohamed Idris pointed out that based on last year's data, cardholders on average spent some RM2bil a month but the debt accumulated at the end of the year was five times more, at some RM10.5bil.
“The Government should raise the minimum repayment limit to at least 30% of outstanding debt per month and gradually raise it to at least 50% over time.
“Anybody earning less than RM3,000 a month should not be allowed to own a credit card,” he said, reminding the Government that 25% of the 106,000 people made bankrupt since the 1970s was because of credit card debts.
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