{"id":3328,"date":"2013-01-20T16:58:19","date_gmt":"2013-01-20T08:58:19","guid":{"rendered":"http:\/\/blog.imoney.my\/?p=3328"},"modified":"2015-12-08T15:24:49","modified_gmt":"2015-12-08T07:24:49","slug":"the-consequences-of-not-making-full-payment-on-your-credit-card-bills","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/the-consequences-of-not-making-full-payment-on-your-credit-card-bills","title":{"rendered":"The Consequences Of Not Making Full Payment On Your Credit Card Bills"},"content":{"rendered":"

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For most people, it is a convenient financial tool that empowers you to \u201cbuy now, pay later\u201d while enjoying exclusive privileges from a vast network of merchants. But for the undisciplined, a credit card is similar to a ticking time bomb threatening to explode on your face with massive interest charges if you spend without restraints and fail to make full payment by the end of the month.<\/p>\n

In Malaysia, banks generally require you to make only a minimum payment of 5% (or a minimum of RM50) of your bills every month. Choose to settle anything less than the full outstanding balance, and you\u2019ll incur interest known as \u201cFinancial Charges\u201d based on a tiered interest rate structure* that looks like this:<\/p>\n\n\n\n\n\n\n\n
TIER<\/th>\nINTEREST RATE<\/th>\nQUALIFIER<\/th>\n<\/tr>\n<\/thead>\n
I<\/td>\n13.5% per year<\/td>\nPay bills promptly for 12 consecutive months<\/td>\n<\/tr>\n
II<\/td>\n16% per year<\/td>\nPay bills for at least 10 out of 12 months<\/td>\n<\/tr>\n
III<\/td>\n17.5% per year<\/td>\nPay bills for at least nine out of 12 months<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

* As recommended by Bank Negara Malaysia, actual interest rates may differ from bank to bank<\/small><\/p>\n

To put it simply, you\u2019ll be paying a minimum of 13.5% per annum interest on your unsettled credit card bills every time you choose not to make full payment!<\/p>\n

To better understand what the consequences of not making full payment, consider these scenarios:<\/p>\n

<\/span>Scenario A:<\/strong><\/span><\/h2>\n