There seems to be a new scam going on for quite some time and I think some of us may already heard of it before. However, I wish to share it here so that more people will be aware of it. This is how the scam works. Normally, they will call you and introduced themselves as an outsource company that do balance transfer on behalf of all banks in Malaysia. Their way of doing balance transfer is different than the normal balance transfer. The normal balance transfer requires you to transfer your balance to another credit card issued by another bank. The balance transfer offered by this company do balance transfer on the same credit card itself. This means that you are able to do balance transfer using your own card and repay the balance with interest back to the bank without the hassle of transferring it to another bank. This plan is said to help you pay off your credit card debts at lower rate. Below are the rates that this plan offers:- CIMB- 14% p.a. (at least 24 months) EON- 13% p.a. (at least 36 months) HSBC, CITI, HLBB AND MORE- approx 14.5% p.a. (at least 24-38 months) This is how the actual plan really works:-
They apply as merchant that can apply for 0% installment schemes from all banks so that they are registered as merchant of all banks.
Then, they swipe your card of the amount of your balance transfer plus the interest that they charged.
Then, they will apply the 0% installment for the transaction so that the bank will charge you monthly installment.
They gain the interest that they charged you.
Even though it seems like you do not lose anything but this doesn't seems legal and you should report to Bank Negara Malaysia if you are approached with such plan. Just make sure you act and think carefully and in your search for lower interest rate for your credit card debt.
I tried to look for some credit card jokes on the internet and found that there were only a few available and most of the sites use the same jokes. Maybe credit card is not really popular with jokes I guess. However, I found two and would like to share it too. Joke #1 (Mostly found in other sites) A man had his credit card stolen. He however decided not to report it to the police because the thief was spending less than his wife did. Joke #2 (This one is not so widely used as the first one) I was signing the receipt for my credit card purchase when the clerk noticed that I had never signed my name on the back of the credit card. She informed me that she could not complete the transaction unless the card was signed. When I asked why, she explained that it was necessary to compare the signature on the credit card with the signature I just signed on the receipt. So I signed the credit card in front of her. She carefully compared that signature to the one I signed on the receipt. As luck would have it, they matched. Since I couldn't find more jokes on credit card on google, I tried changing my keywords to credit card pranks and I found one interesting prank. Here's the link to the Credit Card Prank (Taken from www.zug.com) I believe when we received our credit card, the first thing that we are asked to do is to sign our credit card. This is supposed to be very important as it protects your credit card from being used by another person. However, I rarely see any of the cashier compare the signature on the receipt and the credit card. The prank was about this guy who signed a lot of crazy and funny signature on the credit card receipt but nobody noticed it. It was really funny but please don't try this as you might not know what action might be taken against you. Anyway, just enjoy the reading the prank for now.
Basically, there are a few lies or excuses that you tell yourself before you spend with your credit card and all these are what leads you to credit card debt. How many of these seems familiar to you? 1)It's an emergency Often we use our credit card to pay something that we can't really afford at that time by telling ourselves that it is an emergency. Of course there are real emergencies like paying for a medical expense. But we tend to thinks that stuff such as paying for a car repair which is not your primary car is an emergency. If the car is not repaired and you still have another car for transport, then the repair is not really an emergency. Basically, anything that is not about life or death isn't really an emergency right? 2)I deserve it Another common lies we tend to use. Usually after a hard work or after a long and hard period of saving, we tend to thinks that we deserve a reward. Purchasing something that you fancy or just an expensive dinner at the fancy restaurant to reward yourself is not really a good idea as rewarding yourself should not mean getting yourself deeper in debt. Is this really a reward? 3)It's a bargain When there is a sale going on, we tend to buy more than we need simply because it is a bargain. However, these kind of great deals happen quite regularly and if each time you spent more than you can afford, then it's not really a great deal since you'll be paying extra on your credit card interest. It doesn't mean that we should not buy during a sales, just remember to buy what you can afford. 4)The reward from credit card totally makes it worth We all know some credit card gave us reward points or even cash back when we spend with it but these isn't really worth it if you're not paying your credit card in full every month. If they give you cash back of 2%, then you actually save 2% if you pay the bill in full. If you're not paying the bill in full, at the end you'll need to pay the higher interest. So, avoid spending with the credit card if you are not paying in full every month or else the reward isn't really worth it. 5)I can afford it You might think that you can afford to buy something but the truth is, if you can't afford to pay in cash, you can't afford it. Paying using credit card when you don't have the cash to pay it now means you don't really afford to buy the item and you might just get yourself into deeper debt. So, that's the top 5 lies or excuses we often use. How many of it that you used regularly?
Cancelling your credit card seems to be a good choice if you want to lower your use of credit card and thus lower your debt accumulation. Fewer credit cards also means you can manage your financial life easier. However, with fewer credit card, it is not necessary better than having more especially when it comes to your credit score. Before I begin with how cancelling your credit card may affect your credit score, I will first begin with why we need to have good credit score. Credit score is a number representing the creditworthiness of a person which means the likelihood of the person in paying back a loan. When you want to take a loan either for a house, a car or anything else, bank will evaluate you based on your credit score. Thus, people with good credit score will have a better chance to get their application approved rather than people with bad credit score. Utilization Ratio This is one of the factor that affects your credit score. This is the percentage between the total amount of your debt and available credit. This means that when you cancel your credit card, your available credit will be lower but your debt will stay the same thus increasing your ratio. For example, you have two credit cards, both with RM 5,000 credit limits. You have a RM 2,000 balance on one of the cards, or about 20% of your total available credit. If you cancel the second card, you will then be using 40% of your available credit. It will increase your utilization ratio and damage your credit score. However, this won't hurt your credit score forever. As soon as you reduce your credit card balances (or increase your credit limits), your ratio will decrease and your credit score improve.
Since our PM announced on the Service Tax of creditcard in the Budget 2010. I believe most of us starts to cut on the number of their credit cards. Most of the bank requires you to write in an official letter in order to cancel your creditcard. Calling the bank alone wont be enough. So I browse through the internet to look for some sample on the cancellationletter. Below are 2 samples I found on the internet. Sample 1 (More Formal Approach)
[CancellationLetter Company]
[1234 Cancellation Street] Cancellation City, Cancel 12345
Re: John Doe; Account No. 0987654321 (“My Account”) Cancellation of Account
Dear Sir or Madam:
Please allow this letter to serve as my request to immediately cancel my account with your company. I have included my check No. 1234 in the amount of $10.00 as full and final payment due on My Account. As a result, all of my obligations related to My Account have been satisfied and I expect that no future charges will be authorized on My Account. Immediately upon your receipt of this letter, please confirm the foregoing. Please be advised that in the event I do not hear from your company to the contrary within ten (10) days from your receipt of this letter, I will assume that the facts set forth in this letter are correct and will close my file accordingly.
Sincerely,
Signature Here____________________
Cancelling Member
Address of Cancelling Member
Phone Number of Cancelling Member
Account Number of Cancelling Member
Source: Info Barrel ----------------------------------------- Sample 2 (Simpler Approach)
[Your name]
[Your address]
[Date]
Dear Sir or Madam:
Please let this letter serve as notice that I am terminating my creditcard account effective immediately. Please close the following account: CreditCard Company: ____________
Account Number: ________________
Please send me written confirmation that my account has been closed. Also, please confirm that you have notified all appropriate creditcard bureaus that this account was closed at my request.
Thank you for your prompt attention to this matter.
