Another good news for Malaysia credit card holder. The Association of Banks in Malaysia (ABM) announce reduce credit card interest rate effects from 31st March 2009.

Tier 1
From 15 percent per annual interest rate will be reduced to 13.5 percent per annual with who promptly settle their monthly minimum payments for retail purchases for 12 consecutive months.

Tier 2
Cardholder who promptly settle their minimum payments for 10 months or more in a 12 month cycle will also benefits as the relevant interest rate will reduced to 16 percent per annual from the current 17 percent.

Tier 3
In addition, cardholders who do not fall within the two categories and who are generally termed “Tier 3″ credit card holders will see the interest rate for them come down to 17.5 percent per annum versus the current 18 percent.

Meantime, late payment fee also will reduce from current a minimum of RM10 or 1% of the total outstanding balance, subject to a maximum of RM100 will be revised to a minimum amount of RM5 and a maximum of RM75.

These credit card interest rate reduced will motivate credit card holders to diligently make at least the monthly minimum payment of 5 percent of their total outstanding balance promptly since credit card holders will now stand to have significant savings in the form of interest rate differentials of up to 4 percent when moving up the Tier, i.e from 17.5% for “Tier 3″ to 13.5% for “Tier 1″. The reductions in interest rates should give rise to savings for all credit card holders to better enable them to make the minimum payment. It is also envisaged that more “Tier 1″ credit card holders can now afford to plan to settle their amount outstanding in full monthly.

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