Banks in Malaysia are actually no better than a licensed ah long (loan shark). I remember the time when ATM cards were issued free of charge and a customer could just walk into any bank branch to change money and/or coins.

However, those days are long gone and today, banks are making excessive profits at the expense of their customers and such actions unfortunately, are sanctioned by Bank Negara Malaysia.

The abolishment of the 20-day interest free grace period for credit card customers who do not settle their outstanding balance in full is another example of banks flexing their muscle once again.

On the pretext of lowering the interest rate from 18% to 15%, banks are claiming that consumers will benefit and the banks concerned are ‘making less profits’.

Such a claim is laughable and banks, being super-profit making organisations, will never implement policies that are a benefit to their customers and a detriment to themselves. It is obvious that there are more customers who carry an outstanding balance than those who can afford to settle in full, or else it would be called a charge card and not a credit card.

In addition, for those who can settle in full, the reduction in the interest rate from 18% to 15% is of no meaning. It would be a different story if banks offered a rebate of 3% to those who settle their outstanding balance in full.

By abolishing the 20-day interest free grace period, credit card customers actually lose money by spending on their credit card. This is because the interest charged is much higher than what the banks are giving on their savings accounts to their customers.

The banks may probably say, customers can choose to spend with cash instead. This will result in customers making more frequent ATM cash withdrawals but we all know that banks also charge for ATM withdrawals exceeding a certain frequency.

The last choice is for customers to make bulk ATM withdrawals thus exposing the customers to being robbed.

So, it would seem that either way, the customers’ loses out.