July 9, 2008
On average, one-third of 2.7 million credit cardholders use their credit cards as a payment instrument, settling their credit card outstanding amount in full every month.
Over half the cardholders pay at least the minimum amount due promptly and roll over the remaining balance.
Wow! So 900,000 settle all the outstanding amount promptly. 1,350,000 peeps pay at least the minimum. And 450,000 are waiting for their turn to do the AKPK.
1,600 turn to Bank Negara’s AKPK unit every month
Dec 02, 2007
Every month, more than 1,600 individuals turn to the Credit Counselling and Debt Management Agency (AKPK) to help them overcome their financial difficulties.
The number seeking help monthly has tripled since the agency was set up 18 months.
This statistic was from Dec 2, 2007. Before the Election. Before the fuel hike. Reckon things got better?
Of the number that receives counselling, more than 25%, or 430 individuals, sign up for the Debt Management Programme, through which AKPK helps them renegotiate their loan repayment schemes with financial institutions.
AKPK chief executive Mohamed Akwal Sultan believes that more people are finding themselves in financial trouble because of poor financial knowledge.
“The sample size is small and may not be a true reflection of the nation’s problem. It is likely to be a much bigger problem,” said Akwal, adding that more people were seeking AKPK’s expertise.
AKPK is a wholly-owned subsidiary of Bank Negara that provides financial counselling and debt-management services to individuals at no cost.
Last year, 6,837 individuals sought help from the agency. This number almost tripled to 20,853 individuals up to October this year.
6,837 in whole of 2006. 20,853 for the first nine months of 2007. I dread to read the figures for 2008.
“Many people come to us when they are no longer able to manage their debts,” said Akwal.
Most of those who approach AKPK come from the Klang Valley and are in their 30s and 40s.
“At this age, the cost of living goes up generally because people have commitments such as family and housing payments,” said Akwal.
Other reasons contribute to their financial problems, the main causes being loss of control over the use of credit cards and poor financial planning.
As of September this year, the total household debts stood at RM351bil, with the ratio of non-performing-loans at 7%.
A non-performing loan (NPL) one that is in default or close to being in default. Many loans become non-performing after being in default for three months, although this can depend on the contract terms.
“At a single digit, the debt in Malaysia is still manageable,” said Akwal.
Manageable maybe. Worrisome just the same. And knowing official figures, I have my skepticism.
“The statistics show that our household indebtedness to the banking sector in Malaysia remains within prudent levels at 52.1% of the GDP,” he added.
Credit card debts alone stood at RM21.6bil, with non-payment of credit card loans amounting to RM591mil, or at an NPL ratio of 2.7%.
Sadly, I'm part of the statistic. No, not them NPLs. Almost though, by surviving the bare minimum. Fortunately the total credit limit for both cards barely touch 5 digits or I would have gone under.
“If you look at (the NPL for) credit cards alone, the percentage is small. It’s not a big problem,” said Akwal.
Not a big problem? Yeah, right.
It is for this reason that Akwal would like to promote the use of credit cards if given the opportunity.
“The credit card is like a kitchen knife. It has many uses but if you are not careful, you can cut yourself,” he said.
Well said Mr. Akwal sir. Unfortunately for some of us, that is the only option to survive another day. Am wising up a bit. Am living like a pauper now. But am yet to have the nerve to skim on the kiddies' lifestyle. Hope they don't grow up into spoiled, pampered brats.
But how can the AKPK manage when banks are selling and deceiving like crazy?
2 comments:
Credit card debt is a problem for many people and is a major contributor to personal debt. Funding your lifestyle with a credit card is easy but the hard part is paying it off and clearing the debt.
Very true littlestar. Problem is, there are more and more people buying groceries and other basic essentials with them cards nowadays. Yuppies used to be buying luxury items and pay them using the zero interest installments or paying them bit by bit. But paying for groceries bit by bit or during year end bonuses?
Reckon it's the signs of the time.
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