Bank Negara Malaysia's Guidelines for Credit Card should be fully enforced by all card issuers come 1st January 2012. Back in March 2011, I published my article titled Credit Card Minimum Annual Income Requirement Raised to RM24,000 where I mentioned and touched on BNM guidelines. Besides the need to earn RM24K to be eligible for a credit card, card issuers can no longer increase the credit limit of the cardholder without their agreement.
Since the imposition of government service tax of RM50 per year, many cardholders have been terminating their credit cards with free annual fees and only keeping those that benefit them (exception for my case, hehe). One of the method credit card issuers adopt to entice their cardholders to remain holding their credit cards is by giving them high credit limit (more than the cardholders really need).
Over the years, two particular issuers have been increasing my credit limit periodically, and they are Hong Leong Bank and Citibank. And you know what, these two said banks do not offer 0% Balance Transfer and Hong Leong Bank in particular always calls me up to offer their non 0% Balance Transfer and Personal Loans. I guess with the increase of credit limit, it allows the cardholder to be deeper in debt; and thus, the banks earning more from their non interest free products besides making tons of money from the exorbitant interest rate from those with Outstanding Balance.
So, you see, banks don't mind "awarding" higher credit limit to their cardholders and hoping that the cardholders fall into their well planned trap. However, with BNM new rulings, card issuers cannot increase credit limit of their customers automatically. So how do the banks overcome BNM ruling to execute their trap (increase credit limit of the cardholder)?
Well, instead of them waiting for you to request that your credit limit be increased (and maybe you won't call them at all since you may be afraid they'll reject your request and loose face, hahaha), they now sent you an invitation to increase your credit limit via Short Message Service (SMS)!!! It was reported by a LYN forummer that he received such a SMS from Hong Leong Bank.
Here's is a sample of what my darling wife received from Citibank via SMS:
Fr 66399: RM0.00 Citi Offer: Increase spending limit of yr credit card ending 8888, fr RMxx000 to RMxx000. To accept, please call 0323831100 (Mon-Fri, 9-6pm) by 10 Jan 2012
They even give you a dateline for you to commit. Those who are eager to increase their credit limit will no doubt call Citibank up and accept the offer.
Here's my comments on my wife's Citibank PremierMiles Visa Signature credit card:
Firstly, my wife is unemployed and does not receive any monthly fixed income (except pocket from me, but I can't term it as salary). She applied for the Citibank PremierMiles credit card sometime in the first quarter of this year when she opened her Citi Gold Account. Me, on the other hand applied for the Citibank Platinum credit card. Now, both of us declared that we are unemployed when we opened the Citi Gold Account and this is should be reflected in their system. Both of us just signed on the dotted lines for our separate principal credit card application; therefore, I got no idea what the Personal Banker filled in the form.
Secondly, she transacted less than RM1K in total with her Citibank PremierMiles as of date, used mostly at Baskin Robbins only to enjoy the discount!
Thirdly, I surprised to see the credit limit awarded to her by Citibank for her Visa Signature. It was higher than her Alliance Platinum credit card which was also applied through her Alliance Privilege Banking account. But just to let you guys know, I was shocked two months back when I found out what Standard Chartered Bank gave her for Visa Infinite credit limit (once again, she declared she's a Domestic Engineer).
Fourthly, her Citi Gold account has been closed months ago (mine too after the promotional Time Deposit rate ended) and don't have a sen with Citibank.
So, how the heck Citibank decided to increase her credit limit is mind boggling.
My wife now has four principal credit cards of her own; and like me, she has no monthly salary. So for those of you who do not earn RM24K a year but want a credit card with high credit limit, apply it through Privilege/Priority/Premier Banking.
Anyway, I told my wife not to accept the invitation as she hardly use the card and as such no point to have a higher credit limit. Should the card be cloned or stolen it would mean more headaches; but, more importantly to prevent any damage to my side should she suddenly decides to go on a shopping spree. And for those of you who receive similar invitation to increase your credit limit via SMS, my advise is that you call the number behind your card and verify with Customer Service that the offer is genuine.
HAPPY NEW YEAR 2012!
OTHER RELATED POSTS
Click here to read more about credit cards issued with Premier Priority Privilege Banking and that includes Citi Gold Account too. You don't need to earn RM24K per year to have a credit card.
Hi there,
ReplyDeleteI was wondering if having many credit cards and high credit limits will hurt a person credit rating in obtaining loans eg. personal or house loan in the future, even without any outstanding balance on any of the cards?
ykwc, the answer to your question is YES. The banks have some kind of method calculating it, can't remember what is is called.
ReplyDeleteBut when the time comes, you can always reduce your credit card credit limit to satisfy their requirements.