Sunday, November 08, 2009

Merchants Charge Credit Card Users

The Malaysian government has decided to impose a service tax of RM50 for each principal credit card holder wherelse the supplementary card would be penalised with a service tax of RM25.

Reason given for the implementation of the service tax is to 'teach' credit card holders to spend wisely. What else does the government want to teach me where my credit card balances are clean every month? That I reduce my charges to the credit cards in spite of me having settled all amounts every month? You call that teaching but I call it penalising.

As I'm renovating my house, I was able to charge to my credit cards for lots of purchases and raked up lots of points at the same time lately. I do have the cash but I prefer using my credit cards to pay for it owing to the points.

Unfortunately, the government has decided that I'm to be penalised for using the credit cards. Ok, maybe the government has to think of some ways to earn some revenues to maintain the nation's economy.

But what do you say when the merchants, who have signed up with banks to have a credit card facility in their businesses, are also charging consumers like you and me.

Of late, I have been shopping around for many stuff for the house renovation. Certain shops (not all) that accept the usage of credit cards (applies to both VISA and MASTECARD) for payments have told me this - "I have to charge you 3% extra because you are using the credit card to pay". If you pay by cash, it'll be a bit cheaper.

The goverment is taxing me and now the merchants are passing their costs to me as well. In the end, it's the consumers that are dying.

As far as I understand is that merchants arranged to have credit card facilities in their business premises for their customers' conveniences. At the same time, they'll tell their customers that the credit card facilities were set-up for the benefit of the customers but the customers would have to bear that costs. Fair?

One merchant has fixed the amount of money to be paid if you use your credit card. Say RM5 for each credit card transaction.

What does VISA and MASTERCARD have to say about such practises? Does your company explains to the credit card users who should bear that 3% charges?

What does our local banks have to say about such arrangements? Do you all (banks) know about such games being played?

Are the merchants permitted to pass the costs to the customers? What's the answer?
Tags: VISA, MASTERCARD, Service Tax, Credit Card



Blogger bZbee said...

1 malaysia " rakyat diutamakan, VIP masih kelas 1"......

08 November, 2009 07:55  
Blogger foongpc said...

Yes, I agree with you it's not fair that we are charged RM50 tax for using credit card and it's also not fair for the merchant to pass the costs to the consumer. But what to do? A lot of merchants are practising it and nothing is done about it!

08 November, 2009 23:00  
Blogger Ted said...

Being charged 2 or 3% depends on the shops themselves sometimes, but i do know that some places that sell things with very low margin (those that throw prices) will of course have different prices for cash and credit cards. Esp if u buy camera lens or equipment. If certain promo items are marked up say only less than 10% then 2% taken up by the banks for credit card usage...then they may pass on that credit charge to the customers.

09 November, 2009 09:38  
Blogger Johnny Ong said...

bzbee - 1m'sia is just a campaign until i see real changes

foong - by right, merchants are not allowed to do so

ted - it's all abt manipulation by merchants just to earn that extra percentage

18 November, 2009 00:42  
Anonymous alan tan said...

Banks have said that merchants are not supposed to levy this surcharge!

03 December, 2009 14:27  

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