If you’ve been following my posts, you would have known by now I am not a big fan of credit cards. While I have nothing against credit card companies’ policies, but I do believe very strongly that credit card is one of the most easily abused financial tools that can put an individual in a financial unhealthy state. I feel that the cons of using plastics far outweights the pros (I can only list convenience so far in the pros category).
Daily Express on the new breed of debts…
Designed to provide financial savings to customers who chalk up high monthly phone bills, the Citibank Celcom Credit Card offers a five per cent cash rebate on Celcom postpaid plans and another five per cent for Celcom bills that are paid via Citibank’s One Bill facility (monthly auto-pay).
“In Malaysia, mobile phone penetration stands at more than 20 million. It gives our customers the freedom to speak longer while enjoying bigger cash rebates and accumulating reward points.
Let’s do some simple maths, based on the assumption that this new credit card imposes the same interest rate charges of 1.5% monthly. If you owe the phone bills unpaid for more than 7 months, the interest that you need to paid will be 1.5% multiplied by 7 = 10.5%. For simplicity’s sake, we are calculating this without taking into account the effective rate of interest (it will be slightly more than 10.5% if we did).
Hence I see this as a pretty “convenient” way of subscribing one’s financial health to negative ailments- debts. Yeah, the total 10% rebate definitely looks tempting, but when we are not paying something in cash, it is also tempting that we start abusing the newly found convenience by talking more nonsense over the air.
Either way, when you understand that credit card companies can only make money when you owe them interest, you’d better make sure you read the fine prints and make yourself credit-card-debt-proof.
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ShadowFox
