DISCOVER the Road to Financial FREEDOM!

Every credit card is set to certain credit limit based on your income level and it varies from person to person.

Basically there are three type of credit card:

1. Classic Card
2. Gold Card
3. Platinum Card

The credit limit for all these are credit cards range from RM4,000.00 to RM35,000.00

Many credit card holders would like to obtain a higher credit card limit in order to get higher purchasing power.

With the RM50 service tax on each principal credit card, charge cards, including free cards and RM25 for supplementary cards on January 1st 2010, some bank  has automatically double or increase  the credit cards limit in order to retain their customer base.

Accepting  the increase credit limit May NOT be the Best Choice!

WHY?

Assuming your increase credit limit is RM18,000, you are liable to RM18,000 even NOT use by YOU in the case of credit cards fraud.

In another word, if you lost your credit card without informing the bank and the theft had spend RM18,000, YOU HAVE TO PAY and LIABLE FOR IT!

Therefore your credit card is like TIME BOMB if it is LOST!

There is  a Credit Card Guideline (the Guideline) that limits the liability of a cardholder to RM250 for unauthorised use of lost or stolen cards under certain conditions.

But banks simply ignore this Credit Card Guideline and instead pursue the cardholder for the money.

Read more on Banks Overcharge Consumers by Ignoring the Credit Card Guideline

Where unauthorised transactions are concerned, many banks have often gone against the Guideline on 2 aspects:

Firstly, these banks have been guilty of charging cardholders more than RM250 for fraudulent purchases even when they have fulfilled the conditions set out in Clause 13.2 of the Guideline.

Clause 13.2 says that “The cardholder’s maximum liability for unauthorised transactions as a consequence of a lost or stolen credit card shall be confined to a limit specified by the issuer of credit cards, which shall not exceed RM250.00 provided the cardholder has not acted fraudulently or has not failed to inform the issuer of credit cards as soon as reasonably practicable after having found that his credit card is lost or stolen.”

Yet there are many cases where the cardholder has not committed any fraud and had immediately contacted the bank upon discovery of the loss of the card, but was still held liable for all the unauthorised purchases made before the bank was informed.

The bank will always direct the cardholder’s attention to the clause in the card agreement which states that all transactions carried out before the loss of the card is reported to the bank is to be borne by the cardholder.  No mention is made of Clause 13.2 of the Guideline by the bank.

In some cases, the bank may offer to settle the matter if the cardholder pays 60% to 70% of the disputed amount.

The cardholder may take up the offer, thinking that it is the best deal he can get.  However, if he has to pay anything more than RM250 he has been cheated.

Secondly, banks are guilty of making cardholders pay for the unauthorised transactions without first proving that the card was indeed used by the cardholder.

Clause 13.3 says that “where the amount imposed on to the cardholder for unauthorized transaction due to lost or stolen credit cards is in excess of the maximum liability limit, the issuer of credit cards has to prove that the cardholder has acted fraudulently or failed to inform the issuer of credit cards as soon as reasonably practicable after having found that his credit card is lost or stolen.”

In other words banks can only charge the cardholder more than RM250 if it can prove that the cardholder acted fraudulently or did not report the loss of the card  as soon as practically possible upon discovery that it was missing.

In reality, the opposite happens.  It is the cardholder who has to prove to the bank that the transactions were not signed by him.

You are encourage to confirm with your bank on this issue.

Therefore it very important to keep or save the credit card phone number in case of the emergency.

Please be Well inform, Educated and Wise credit card’s user!

Related posts:

1. Avoiding Credit Card Fraud
2. Decreasing Your Credit Card Limit NOW!
3. How to Avoid to Be a Credit Card Fraud Victim
4. How to Pay your RM50 Credit Card Service Tax without Paying| UOB Credit Card
5. Have You Cancel Your Credit Cards|Credit Card Service Tax