According to The Star newspaper, government has already confirmed to impose service tax for credit and charge cards from next year (January 2010). The service tax for principal credit and charge cards is RM50 and the service tax for supplementary cards.
For those who apply a new card next year (2010), he or she will need to pay the RM50 service tax upfront. For those who already have credit cards now, the charge will be imposed on the anniversary date of cards.
To Cut or Not To Cut, That’s the Question
Now, it’s time to decide whether you want to cancel your credit cards or not. Some people hold one or two cards and some people hold 10 cards or even more! Do you want to cancel all the cards; keep all the cards; or just keep one or two?
So it is quite hard for those people who are holding a lot of card because each card has its own advantages like to have discounts at merchants, cash back on the money you have used using the card, bonus points, free gifts and etc.
When to Cut?
You may still want to use your credit cards until they have reached their anniversary date. If you never use the card before, it’s the to cancel it now. Remember to make the cancellation a week or two earlier if you mail them the cancellation request in an official letter.
Which One to Cut?
If you use credit cards a lot, I think, to keep two or three cards are enough. You will then need to pay RM50 to RM150 yearly. Although you may miss some of the advantages giving by the credit card companies but you can at least save RM50 per year for each card.
Here are some ideas you may find useful on deciding which cards to cancel:
- Cancel the cards that you rarely use. If you never use it recently, you will unlikely to use it again.
- Cancel the cards with poor services and inconvenience repayment options. Your petrol and time may worth more than RM50.
- Keep the credit cards that charge you zero annual fees (or waived by the card company). Save some money on annual fees.
- Keep the credit cards that have most bonus points. If you use it always, you will likely to use it again very soon.
Now, take out a paper and list out the credit cards’ total transaction for one year, sort them from the biggest amount to the smallest one. Filter the list with the above suggestions, keep those you want to keep and cancel those unnecessary one.
Wait! Before You Cancel Your Credit Card
Before you cancel the credit cards, be sure to redeem all the bonus points in your credit cards, exchange the points with anything you like for free, be it the coupons, shirts, gadgets or whatever.
The bonus points are your money, you got them when you purchase something and they wouldn’t exist without you to spend some money first. So redeem all the points whenever possible.
To cancel or not to cancel? that’s your choice!
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