Spending in Malaysia

THE TRUTH SUR PRISING About Credit Card Spending IN MALAYSIA What are your assumptions about how Malaysians spend on their credit card? You may have heard the horror stories of poor souls getting slapped by 6 figure credit card debt. And given the fact shopping seems to the national pastime and walking in malls seem to be the national sport – it might be safe to assume Malaysians are one indebted lot. Well think again! Here's some intriguing stats about Malaysian credit card spending that might startle you. MALAYSIANS AND CREDIT CARDS 101 No. OF CREDIT CARDS IN CIRCULATION 8.21 MILLION 28.6 No. OF MALAYSIANS A A A A MILLION ·3.48 1 IN MALAYSIANS HAVE A CREDIT CARD No. of cards RM thousand +10 CREDIT CARDS PER BORROWER Illi Number of credit cards per borrower Outstanding balances per borrower (RHS) Source : Bank Negara Malaysia 2006 2007 2008 2009 2010 CREDIT CARD BALANCES HAVE BEEN INCREASING! A 1,864.33 >B 1,852.39 C 2,004.52 Avg current balance credit card (RM) D 2,055.29 >E 2,079.41 B. F 2,804.65 >G 3,499.29 2005 2006 2007 2008 2009 2010 2011 HERE'S WHAT WE SPEND ON... 7.2% FUEL / PETROL (36.7% WHAT DO MALAYSIANS SPEND ON WITH THEIR CREDIT CARD? AVERAGE MONTHLY SPEND PER CARD (RM) OTHERS 30.2% RETAIL 922.8 4.7% 21.2% UTILITIES 827.5 OF WHICH DOMESTIC SPEND PROFESSIONAL / COMMERCIAL SERVIES OF WHICH INTERNATIONAL SPEND 95.3 UNFORTUNATELY... MALAYSIANS ARE THE 2ND WORST DEBT PAYERS IN ASIA PACIFIC ONLY VIETNAM IS WORST THAN US! BUT WEIRDLY ENOUGH. WE'RE AMONG THE TOP 10 SAVERS IN ASIA PACIFIC! THERE ARE LESS BANKRUPTCIES THAN YOU THINK! >> HERE'S THE GOOD NEWS... 2005 2006 2007 2008 2009 2010 2011 % CREDIT Malaysians are relatively prudent with their credit cards, only utilising 24% of the credit limit extended by banks. Plus, the percentage of LIMIT UTILISED 26% 24% 24% 23% 21% 23% 24% overdue balances are also trending downwards. % OVERDUE BALANCES 15% 15% 13% 11% 11% 10% 09% OUR HOUSEHOLD DEBT FOR THIS SEGMENT IS THANKFULLY LOW... HOUSEHOLD SECTOR : DEBTS BY COMPARISON 03% Others O 05% Credit Cards O 05% Purchase of securities O 08% Purchase of non-residential properties O 15% Personal use O 19% Purchase of transport vehicles O 45% Purchase of residential properties IN TERMS OF LOANS-IN-ARREARS, CREDIT CARD IS CONSISTENTLY BEHIND: MAIN CAUSES OF BANKRUPTCY : HIRE PURCHASE/ CAR LOANS PERSONAL LOANS HOUSING LOANS 26% 21% 14% THE AWESOME BANK NEGARA INITIATIVES THAT KEPT DEBT LOW January Service tax of RM50 on each principal credit card (RM25 for supplementary) is imposed to promote prudent spending. 2007 2008 2009 2010 2011 Minimum income requirement raised from RM18,000 per annum to RM24,000 per annum. July March 20-day interest-free period for new transactions are only for those who make full payments before the due date. Introduction of tiered pricing structure. Credit card holders with RM36,000 per annum or less can only hold credit cards from a maximum of 2 issuers. Maximum credit limit is 2x monthly income per issue. VERDICT? As a whole, Malaysians are a surprisingly debt-free bunch in terms of credit card spend. Besides the fact we often pay late, we do pay and there's hardly any delinquencies. We're a long way to go from the United States' US$962 billion dollars in debt, and we're in no danger of getting there. Having said that, it's no excuse to splurge extravagantly. iMoney.my e and start saving today! Use comparison sites like to compare the best credit card rates INFOGRAPHIC DESIGN BY iMoney.my & spurpress