When the economy takes a dive, the banks react and that is exactly what was done by the Association of Banks in Malaysia. Uncertain economic turmoil is making more and more banks take some serious measures into helping people pay up loans and debts by decreasing interest rates and fines of late payments. Interest rates for credit cards were slashed between 0.5% and 1.5% for Tier-1, Tier-11 and Tier-111 card holders whereas the late payment fees will be reduced a minimum of RM5 to a maximum of RM75 starting March 31, 2009.

Banks all over the country are making it easier for credit card holders to pay off their debts during uncertain economic times. At the current rate, card holders are required to pay a minimum of RM10 or 1% or maximum of RM100 of the total outstanding balance. This rate is about to change my reducing the minimum rate to RM5 and a maximum of Rm75, which ultimately makes many people heave a sigh of relief. With lower rates, Malaysian banks hope that these measures and help spur card holders to pay the monthly minimum rate.

Learning from the 1997 Asian financial crisis, the banks in Malaysia have taken the lead in rates deduction. The Malaysian financial system revised their interest rates to become more reasonable, responsive and dynamic as well as to encourage good repayment habits and financial discipline. The existing local credit card charges in Malaysia are among the lowest in Asia as some regions have a rate of 18 to 42%.

Source: News Straits Time