Making the minimum monthly payment on your credit card is something that should never happen, but sometimes life deals us a heavy hand. To discourage people from making minimum monthly payments (or spending past their repayment ability), a few banks have made revisions to their terms & conditions. Read on to find out.
Citibank
Citibank has updated its definition of a "minimum monthly payment" in its terms & conditions. It is now defined as:
- 5% of *outstanding balance (if any);
*outstanding balance refers to retail transactions + Balance Transfer amount + Cash advance amount + finance charges and fees - 100% service tax;
- 100% Monthly Instalments;
- 100% past due amount; OR
- RM50, whichever is higher
If the current balance is below RM50, then the minimum monthly payment would be 100% of the current balance.
The new definition is effective 27th July 2019.
Source: Citibank
HSBC
Alongside several other revisions of its terms & conditions, HSBC has also updated their definition of "minimum monthly payment" to:
- Minimum monthly payment payable on a due date that's calculated based on:
- 5% of Current Balance + 100% monthly instalment of Credit Card Instalment Plans + unpaid minimum payment in the preceding month's statement; OR RM50, whichever higher.
- OR if the Card Account exceeds the Credit Limit, 5% of the Current Balance + 100% monthly instalment of Credit Card Instalment Plans + any unpaid minimum payment in the preceding month's statement + Overlimit*
- *Overlimit means the amount used on the credit card that exceeds the Credit Limit
The revised definition will only be effective 2nd October 2019.
Source: HSBC - click to read the other revisions too.
Hong Leong Bank
Like the other banks, Hong Leong Bank is also making revisions to several clauses in its terms and conditions. Its revision of the minimum monthly payment is effective 6th August and is defined as follows:
- 5% of total outstanding balance, Balance Transfer amount, Cash Advance amount, Finances Charges and fees;
- 100% of Tax;
- 100% of monthly instalment;
- Unpaid minimum payment from previous motnh's statement;
- 100% of any overlimit amount (amount exceeding credit limit);
- OR RM50, whichever higher.
Source: Hong Leong Bank
Related article: Financial Advice For Fresh Graduates In Malaysia
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