Malaysian credit card guidelines hardly threaten bank incomes

Any reduction in spending arising from the new measures on credit cards, is unlikely to dampen the overall net interest income of banks, says OSK Research. It added that the total credit cards debts in the banking system is still marginal at 3.4 per cent of the total loans base.

Bank Negara Malaysia has revised the minimum income requirement to apply for a credit card to US$ 7,866 from US$5,899 previously with immediate effect.

For applicants or cardholders who earn US$11,799 per annum or less, they can only hold credit cards from a maximum of two issuers.

The maximum credit limit extended to a cardholder shall also not exceed twice their monthly income per issuer.

The Association of Islamic Bank in Malaysia has welcomed the new guidelines on credit cards.

The association said although the income eligibility for issuance of credit cards has increased, consumers below the threshold, have the option to use debit card facilities which are more tailored towards an individual's cash balance and more widely used by Islamic banking.

"These are prudent measures as Islamic banking always propagates care in credit consumption by consumers," its president, Datuk Mohd Redza Shah said.