Debt Management – Get Free and Professional Help

You need help urgently when the following situations describe your personal finance:

• If you are not in control of your money;
• Have more debts than you can manage;
• If you are living paycheck to paycheck;
• Are only able to pay the minimum 5% on your credit card bills;
• If you are taking cash advances from your credit card to meet your expenses;
• Do not have any savings to meet personal or family emergencies;
• If you have a debt collector calling you regularly;
• If you are being served legal notice of demand.

Where can you get free professional assistance in Malaysia? The answer is AKPK (Agensi Kaunseling dan Pengurusan Kredit) or Credit Counseling and Debt Management Agency. AKPK is an agency set up by Bank Negara Malaysia or The Central Bank of Malaysia to provide financial education, financial counseling, and debt management for individuals.

AKPK offers a free Debt Management Programme to individuals who fall under these categories:

• Not an undischarged bankrupt
• An individual unable to manage their own debts
• Must have positive net income
• Not under advanced legal action
• No advanced litigation take by non-FI
• No loans were taken from an institution not regulated by Bank Negara Malaysia

When you have enrolled in the DMP you have to:

• Give up your credit cards
• Change your lifestyle (modify budget/cash flow to live within means)
• Make dedicated and prompt payments

To know more about AKPK you can go to their website at http://www.akpk.org.my

4 Types of People to Avoid Using Credit Cards

Are you one of the following? If so, you should not possess credit cards. Here are the people and the reasons:

Gamblers: The best thing they can do is to give up gambling. With credit cards in hand, they will pile up debt in no time by credit card advances. They always think that by just one more bet they will be able to recover all the losses in the past

Materialistic: They want to keep up with the Joneses. They have to have the latest in a TV set, cell phone and sound system at home. Unfortunately, there is no way to keep up with the trend, because manufacturers are churning out the latest models almost every day.

Your credit cards have spending limit but there is no limit on what you want in life.

What they need are debit cards or prepaid cards and not credit or charge cards

Shopaholic: They are addicted to shopping. They can’t stop the compulsive nature to just shop and shop. What they need is counseling to get rid of the unhealthy habit and not credit cards.

Young graduates: They have just landed on their first job and they have also acquired their first credit card. They are excited to get their first spending experience on their credit cards. They were told not to worry about overspending because they could just pay the minimum amount. They do not realize that they are building up debt and leading their way to bankruptcy. What they need now are debit cards or prepaid cards to control their spending

If you think you can manage your spending within your budget and you want to pay the full amount promptly every month, go ahead and get yourself a charge card or a credit card.

Related post:

4 Types of Plastic Cards to Make Purchases

4 Types of Cards for 4 Types of People

10 Tips to Get Extra Cash Instantly

You have exhausted your emergency fund. And you have almost overdrawn your current account and there are only a few dollars left in your savings account. You need extra cash. First, identify internal sources of funds where you don’t have to incur charges or interest before you get funding from outside sources. Here are the ten sources of fund:


1. Cash your fixed deposits: Sacrifice your interest for premature withdrawal of your fixed deposit. Take out the amount you need and deposit the rest into your savings account.

2. Your children’s savings accounts: There are substantial savings over the years in your children’s savings accounts. You may withdraw but remember to top up later.

3. Liquidate part of your investment: Look into your stocks, shares, and unit trusts. Sell a small part of it to meet your cash requirements

4. Staff advance from your company: Salary advance is the quickest way to get cash without interest and charges. However, the amount will be deducted at the end of the month when you get your pay.

5. Cash value of your life policies: There is cash value in your life insurance policies. You can get a policy loan against the cash value. In fact, if one of the policies is investment-linked just do a partial redemption and you don’t have to repay. The policy is still in force.

6. Get a loan from your friends or relatives: You have to be thick-skinned. It is embarrassing to let your friends and relatives know your predicament. To maintain goodwill when you repay the loan, add a little extra.

7. Pawn your valuables: Don’t let those you know see you at the pawnshop. You can pawn your jewelry to meet your temporary needs

8. Get a personal loan from a bank: It may not be as fast as you think, but the banks are looking for people with good credit standing to give out personal loans. Be one of them. Interest will be charged to your loan and you have to repay in monthly installments

9. Get an advance from your credit card: You get immediate cash at a higher cost than a loan from a bank. You will be slapped with an advance fee and compounded interest as long as the amount is outstanding.

10. Borrow from a loan shark: This is the last resort. The interest rate is exorbitant. You have to make very sure to pay back fully on time or else this will be the beginning of your nightmare.


The best thing to do, however, is to earn some extra money to meet your cash requirements.

4 Types of Cards for 4 Types of People

There are 4 types of cards that you can use to make purchases. They are charge cards, credit cards, debit cards, and prepaid cards. Each type of card is specially catered to different people.


Charge Card: This type of card has no credit limit and you have to pay the amount fully when the statement arrives. It is for the rich and famous. They have spending power beyond the credit limit and they are capable of settling the amount fully upon receiving the monthly statements. Their lifestyle demands a card that they can spend freely and it is only limited by their spending power as demonstrated by their spending pattern. American Express is such a card.

Credit card: People who can exercise self–restrained will find this type of card useful. They don’t do impulse buying and they limit their purchases to what they need and not what they want. They pay promptly and fully and not just pay the minimum amount. They incur no late charges and finance charges. Visa and MasterCard fall into this category

Debit card: This type of card is suitable for young graduates who have secured their first job with decent pay and they want to have their first experience of using a credit card. The card is linked to their current or savings account so they will not overspend. They don’t run the risk of building up debt. You can’t use the card when your fund is exhausted. Visa and MasterCard are the issuers for this type of card.

Prepaid card: This type of card is for people who are budget conscious. They load the card with a specific amount for specific purposes and they spend accordingly. There is no overspending and there is no debt. You can get this type of card which is also issued by Visa and MasterCard.


Choose an appropriate card to suit your current lifestyle.

Credit Cards and the Malaysian Budget 2010

With effect from January 1, 2010, principal cardholders and supplementary cardholders of credit cards and charge cards will have to pay an annual service tax of RM50/- per card and RM25/= per card respectively. More and more people are using credit cards in Malaysia. The number of credit cards in circulation has increased from two million in 1997 to eleven million in August this year. This does not include 285,000 charge cards in use. Service tax of RM50/= was previously imposed with effect from January 1, 1997, and abolished on April 1, 2001. The latest service tax is to promote careful spending among Malaysians.

Credit card transactions growth dipped to 6 percent to RM38.9 billion in the first seven months of the year, compared with an 18.2 percent increase in the same period last year,

Individuals with credit card related debts seeking the services of the central bank’s Credit Counselling and Debt Management Agency increased by 38.6 percent to 7492 from a 75.9 percent growth to 5406 in the same seven-month period last year. These accounted for 74 percent of total cases under the Debt Management Programme.

For those people who are holding 5 or 6 cards, it means an extra expense of RM250/= to RM300/=.just to keep the cards. It is time for them to reduce their cards to not more than two. Too many cards mean too much temptation to overspend and too many cheques to issue to settle debts from too many banks.

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.

5 Tips to Choose a Credit Card

All the banks are going after you to sign up for one or more of their credit cards. How do you determine which one is best for you? Consider the following 5 points to make up your mind:

1. Free For Life: Look for a card without charging annual fees. CIMB Petronas MasterCard is such a card. You can save around RM100/= to RM200/= per year.

2. Low-interest rate: Check around to determine which card charges the lowest rate in interest on outstanding amount. This is not an important consideration when you pay credit card bills fully on time.

3. Rewards or cashback: You have to decide which one is your preference. Would you like to accumulate points to redeem for goods or you prefer to pay less with cashback or rebate? For me, I would like to pay less at the end of the month to reduce my expenses and cash outflow.

4. Gas, airline miles, or grocery card: It all depends on which one you use the most. When you are always on the road, get the CIMB Petronas MasterCard. When you do a lot of grocery purchases get the Giant-Citibank Credit Card You pay less when you use both cards for your petrol at Petronas and sundry purchases at Giant. If you are a frequent flyer you may wish to consider Air Asia Citibank Card and accumulate points and fly for free later.

5. Customer satisfaction: According to J.D. Power and Associates’ report about 2009 Customer Satisfaction With Credit Cards, they have identified the six key factors of interaction, fees and rate, billing and payment process, rewards, benefits and services, and problem resolution. American Express ranks the highest among credit card issuers for a third consecutive year. Get a card with a financial institution that gives you the most customer satisfaction.

When you have a card, use it wisely. A credit card is for convenience and savings and not for credit. Pay fully and promptly every month to stay out of credit card debt