Almost all credit card issuers revealed that they would not subsidise the RM50 service tax for credit card that came into effect on Jan 1 this year. With the exception of Bank Kerjasama Rakyat Malaysia, which unconditionally subsidises the service tax, all credit card issuers impose specific conditions upon customers in order to offset the amount. (see graphic)
Most credit card issuers allow the amount to be offset with the cardholders’ reward points earned. However, the amount of points required to offset the RM50 is usually lower than a department store shopping voucher redemption of similar value.
Another mechanism offered is a RM50 cash rebate specifically tackling the service tax amount. It requires cardholders to utilise their cards – usually with a minimum value on transactions – to be entitled to the rebate.
In principle, the service tax is to be paid by cardholder, who may also utilise reward points earned from using the card for the purpose.
Many credit cardholders have already started cancelling their surplus credit cards. So, if we have more than one card, we have to decide what to snip and what to keep based on the best cash rebate and reward point deals. For the time being, I just stick to my Maybank credit card. One is enough especially during this economic downturn.