New Rules & Requirements For Credit Card Application In Malaysia

Bank Negara Malaysia (BNM) has set the new rules for credit card application. The credit card rules were tighten. Below are the major announcements:-

IMMEDIATE EFFECT NEW CREDIT CARD RULES TO BE IMPLEMENTED

Minimum Income Requirement
Previously: RM18,000 per annum
Currently: RM24,000 per annum

Maximum Credit Limit
Previously: Credit limit was set based on bank’s discretion, respectively.
Currently: For those who earn less than RM36,000 per year, credit limit shall be capped at two times their monthly income per issuer.

Maximum Credit Card Issuer
Previously: No restriction on holding credit cards from multiple credit card companies (issuers).
Currently: For those who earn less than RM36,000 per year, they shall be restricted to hold credit cards from not more than two issuers.

ADDITIONAL NEW CREDIT CARD RULES TO BE IMPLEMENTED IN FUTURE

Effective December 2011,
Cardholders’ annual statements issued by issuers shall include the details of time frame needed to fully pay off the outstanding balance and the total interest costs to be charged if only minimum repayment is made.

Effective 1 January 2012,
Issuers shall send a transaction alert via SMS for cardholder after each transaction is performed.

Effective 1 January 2015,
Personal Identification Number (PIN) verification shall be performed for all credit card transactions.

This is good for us and we should spend our money wisely and avoid becoming a credit card slave! Plan before spend and spend within our means.

Common Mistakes To Avoid When Invest In Unit Trust

Below are some few common mistakes made by some investors:-

1. Ignorant of specifics of fund are acquiring.

2. Treating unit trust investment like a stock investment. Unit trust need at least 3 years to average down the lost years.

3. Lack of monitoring causes investors to make another mistake. They should take profit when a fund is rate of return is hitting the targeted rate of return.

4. Cut the loss as soon as possible if the fund is not well perform after your pre-set time horizon.

Common Mistakes To Avoid When Investing In Stocks Markets

1. Consider only company fundamentals and ignore market risks (Political risk, Natural disasters, and government conflicts).

2. Pick a “CHEAP” price share (below RM 1 Share) not its value and without looking P/E (Price to Earning) ratio or whether stocks Over valued or Undervalued.

3. A bullish stock market is breeding ground for mistake. Let’s say, the banking sector P/E ratio historically trades at 14 to 15 times. In bull market, can shoot up and hit 20 times P/E ratio. If you are emotional, you will lose track of fundamental (value) and buy at high price.

4. Investing base on “Rumors” which can be partly true or false and “Speculation” without research on company fundamentals are very dangerous.

5. Lack of monitoring and strategies are also a very common mistake. Malaysia stock market is unlike US stock market. If you buy a stock and would keep for few years later and expected the stock rising without consistent monitoring may exposure to even higher risk. 

How To Ensure You Have Sufficient Fund For Your Children’s Higher Education Fund?

Few steps for you to ensure you have adequate funds:-

1) Determine time horizon that each your children has before they go for their tertiary education.

2) Determine their main area of interest and decide if they want to admit in local or oversea university.

3) Determine the course fee and cost of living. (Financial Adviser may assist you for info).

4) Work out total amount needed with projected rate of education inflation. ( A )

5)  Determine the projected amount of savings you might have from: Unit Trust Portfolios, FD, Maturities Policies, Property Portfolios..etc. ( B )

6) Compute the difference ( A – B ) and work out new or supplementary savings programmed. (May work with financial adviser to determine the amount to be set aside)

7) The sooner you realize the need to have adequate funds, the better chances of having compounding interest to work for you.

You have the power in your hands to Make Sacrifice Now so that you have a more Comfortable Future!