Credit Card Debt ….

What a relief it is to be rid of debt, plastic debt that is. Believe it or not, the actual Annual Percentage Rate of a daily rated credit card interest works out to 19.7% even when you pay your debt on time. That given the amount paid is more than the 5% minimum sum and if you take cash out from your credit card, it works to an almost whopping 43.9% APR! Sneaky but 43.9% even when you paid off your credit card cash advance as the way they settle your debt is as follows:
{Given You pay $1500 a month like me}

The LOWEST INTEREST FIRST
Means, the ZERO PERCENT Installment plan which you took to pay for that PC etc.

ie: The Monthly rate of say $190/mth is taken off first from your payment (your bonded with Maxis for 2 Years). The balance gets to pay these…

The Zero Percent Balance transfer which you paid 5% anyway upfront,
(Whatever the balance is available due, means say I transfer $5000 for 6mths, it’s $833)

What is left is $877 paid for these.
Then the Credit Card Annual Fees (included as 2.5% Exchange Fee)

Then it pays for your Lowest Rate Retail Purchases, if Any.
Then the Finance Charges due last month and this month ($450 this month!!)
Then it pays for your purchases ($427 )

Means, these will come back to haunt you:
The Cash Advance FEE 5% a month
The Overseas Transaction FEE 2.5% of the converted amount.

YIKES! You think paying $1500 of the $30000 owed will pay for your bills?
NAH! It pays only for $427 of your purchases.

STUPID?! You bet your paycheck on it!
TAKES YOU 73 months to pay off your debt!!
73 Months or 6 years plus to clear off a debt that you take thinking you save money by paying the minimum sum. FORGET what they say behind the RHB Card statement… it’s bull crap. Not 24mths to clear off, but actually 73 months even without taking a balance transfer or even a cash advance!!

How to save yourself from it??

1) CUT IT UP!!
2) CANCEL IT. There goes your credit line.
3) Sell all your gold NOW (Pajak Gadai gives RM70/gram)
4) Uplift all your Fixed Deposit (why save on 3.4% interest when you get charged 43%!!)
5) Save your paycheck!! Spend on basic essentials only
6) last resort…seek help from Bank Negara. It’s called AKPK. They will restructure your debt and cancel the debt. But no cards or loans for next 3 years.

If you malu..ask money from Ma and Pa before Chinese New Year!

What I did? Well, I canceled my problem with RHB. They were a pain in the ass. Now I owe only the base amount of RM3000 which is about my 2 weeks fuel money. I have to cut my travel expenses now.

What is left? I have to clear off what is owed to CIMB. Yes..it’s a roll over,but at least no more interest. They lowered my rate to about 7.5% as I reduced it to a term loan instead.

A fresh start. A relief. No more Ah-Longs calling.I’ll stick to my Debit ATM Card from AM Bank instead and earn more points.