Free (but in debt) for life

“Free credit card sir! Pre-approved and free for life!” barked the hipster-looking lass, who appeared from nowhere holding her red clipboard.

For most of us, being hounded by credit card sales personnel is a customary occurrence when visiting shopping malls. Being a regular “window shopper”, I have discovered my own near foolproof retort: “I am a bankrupt. Can apply eh?”

Credit Card Debt

(Well, technically I am one as I do owe financial institutions more than RM30,000, which is the minimum amount to be labeled a bankrupt).

The mostly well-mannered salesperson will swiftly turn away; the few persistent ones will follow me three shops down the walkway disbelieving my reply; the rare rude ones will grasp my hands to say that “even blacklisted people can approve.”

With the country facing an escalating number of bankrupts – there were 19,575 bankruptcy 

cases filed last year – and Malaysian household debts having increased 12% annually to RM784.4bil, these forms of promotional campaigns by credit providers have to be curtailed.

Thus, the new regulations introduced by Bank Negara Malaysia to curb the increasing national household debt and to encourage responsible lending by credit providers are indeed well-timed.

These measures include capping the maximum tenure of 10 years for financing for personal use, maximum of 35 years for financing of residential and non-residential properties, and prohibiting pre-approved personal financing products.

While banks and credit providers have to take a portion of blame for their part in aggressively 

pushing credit products out to consumers, they also have to be applauded for their growing efforts in promoting wealth management and financial planning services.

Financial institutions are getting more creative in delivering insurance packages, investment options, as well as retirement financial schemes. It is good to see that instead of encouraging the public to live a lifestyle beyond their means, banks are striving instead to help Malaysians increase their savings, secure their future and to plan for their golden years.

Rest assured though that before long, with plenty of innovation and some exploitation of the regulatory loopholes, the hipster credit card salesgirl will surely be back to haunt you at your next shopping mall visit.

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