Malaysians, cancel your credit card now!!!

Hey, do you have any credit card with you? How many cards do you own? With announcement of RM50 annual service tax on principal card and RM25 for supplementary card during Malaysia Budget 2010, some people already started to reduce the quantity of their credit card.

Cancel your credit card?

By the way, this is a special service tax. Even though you have a free for life credit card that you don’t need to pay annual fee, you still need to pay RM50 annual service tax to Malaysia government. (Refer here) Malaysia Prime Minister, Datuk Seri Najib Tun Razak said that RM50 for credit card not a big deal to Malaysians. And they are getting the extra RM1,000 tax relief. (refer here)

Does this RM1000 tax relief really help Malaysians? Lets do some calculations… For example, I have 2 banks’ credit cards (both MasterCard and VISA). (This is very common to all Malaysians, some have even more than 10 principal credit cards). So I need to pay 4 x RM50 credit card service tax, total == RM200. And I am in tax range of 13% which mean that I can only get RM130 back from RM1000 tax relief. In the end, I need to pay RM70 (RM200 – RM130) more back to Malaysia government. So who is benefit from this? Malaysia government or Malaysians?

For me, I am sure that I will cancel extra principal cards and supplementary cards to avoid paying more tax. Maybe reduce to 1 MasterCard and 1 VISA credit card. How about you?