Credit Card is a Lucrative Business

Financial institutions make money from cardholders all the way from the moment they receive their cards until the day they close their accounts. Furthermore, banks charge merchants a fee for accepting credit cards as payments for each and every credit card transaction.

Let’s take a look at all the credit card charges imposed on cardholders:


1. Annual fee: An annual fee of around RM150 is charged to your card every year.

2. Cash advance fees: 5% of the amount drawn, subject to a minimum of RM15/=

3. Late payment charge: 1% of the total outstanding amount, subject to a minimum of RM5/= and a maximum of RM75/=

4. Returned cheque fee: RM50/=

5. Finance charge: Finance charge for cash transaction is 1.5% per month or 18% per year. The finance charge for outstanding amount is between 13.5% and 17.5% per annum.

6. Replacement card: RM10/= for the first time and RM50/= for every subsequent replacement

7. Request for card statement: RM5/= per monthly statement

8. Request for sales draft: RM15/= per copy

9. PLUS/CIRRUS ATM withdrawal: RM10/= for each cash withdrawal.

10. PLUS.CIRRUS account enquiry: RM2/= for each transaction

11. Conversion for overseas transactions: The bank will impose a 1% administrative fee.

12. Closing of account: RM10/= upon closure of credit card account with credit balances.


As for merchants who have signed up to accept credit cards as payment they are charged a merchant fee or a discount fee of around 2% for every sale transaction. A merchant with a monthly sales volume of, say, one million, a bank will deduct RM20, 000/ =.and remit the balance of 980,000/= to the merchant. Can you imagine the amount of fees banks can collect from retail chains like Giant, Carrefour, and Tesco every day?

In order to avoid all these charges, as a cardholder, you have to make sure that you make payment promptly and fully every month and you have to take care not to issue a bounced cheque.