IT is shocking to find out that the number of bankruptcies in Malaysia has skyrocketed. According to news reports, 7,306 people went bankrupt between January and April last year.
Banks today hire agents or representatives looking to sign up members for credit cards.
These agents can be found in shopping malls, hypermarkets or where there are crowds and they “invite” everybody to sign up for a credit card. This is sheer harassment.
The results are overwhelming, which is why banks continue such a practice.
Banks should start new cardholders on a low credit limit and raise it only if the cardholders are good paymasters.
Singapore is also trying to reduce its number of bankrupts. Its banks have embarked on a package to this effect.
Debtors can now convert their accounts into term-loan accounts that allow them to pay what they owe in instalments.
That is a brilliant plan to help those who owe banks a lot of money.
This is a win-win situation as banks get to keep the credit card customers and yet, they get their money back in instalment payments.
The best way to avoid getting into the bankruptcy mess is to turn credit card debts and overdraft debts into term loan accounts of five or eight years.
LAU BING, Subang Jaya, Selangor