Maybank is currently running a very innovative giro payment promotion scheme for their credit card holders.

Under the Maybank Pocket Me Giro payment system, your Maybank credit card bills will be automatically paid each month using giro.

Maybank will also give you cash rewards into your bank account based on the bill size rounded up to the nearest $5.

For example, if your outstanding credit card bill is $103, you will get a $2 cash reward for that month. If the bill is $200, you will get $5.

The promotion will run from 15 June 2010 to 30 June 2011. The cash reward awarded will be up to a maximum of S$5 per month till 30 June 2011.

Kudos to Maybank for coming up with this. With Pocket Me Giro, you won’t forget about paying your credit card bills fully (save on interest) and you even get rewarded for doing so!

ANZ is currently having a special promotion on their ANZ Platinum credit card.

Applicant who successfully apply for the ANZ Platinum credit card during the period from 17 May 2010 to 31 July 2010 and charge a minimum amount of S$100 in a singe or multiple transactions within one month from the date the Credit Card is approved, shall receive a S$50 cash rebate.

Existing holders of RBS Credit Cards and/or ANZ Credit Cards are not eligible to participate in the Promotion.

Applicants who had cancelled their Credit Cards in the last six months prior to the commencement of the Promotion Period and re-apply will not be entitled to the Cash Rebate.

The ANZ Platinum credit card requires a minimum annual income of S$50k. More details on the card and application can be found here:

ANZ Platinum credit card

An article in the Straits Times reported that younger Singaporeans in the 21 to 29-year-old age group have the highest default rate compared to other age groups when it comes to loans.

According to numbers from DP Credit Bureau, 7.54% of people in the 21 to 29-year-old age group default on their credit card loans compared to the average default rate of 3.88% across all age groups. Of those who do not default, I wonder how many people actually roll over the debt (do not pay in full) and incur the excessive interest rates of credit cards.

A credit card can be a very useful tool if used correctly. If you pay all your credit bills on time, you are essentially getting a free short term credit line. Do it for all your bills every month and it would be like a perpetual free credit line. Not to mention the discounts and credit card points you get.

On the other hand, using it for instant gratification with the intention of paying the minimum payment every month can lead to a snow-balling of debt with devastating effects.

Other kinds of loans such as overdraft, mortgage and motor vehicles also show the same statistical relationship.

A higher default rate means that young people are spending more than what they can really afford. This disturbing trend of “spend what you have not earned” and not having the means to repay them doesn’t bore well for the future.

My friend (belonging to the 21-29 age group) was telling me that she would prefer using cash for making purchases rather than a credit card. Her spending habits usually involves zeroing out her bank account by the end of the month and living paycheck by paycheck.

If she used a credit card for a purchase, she would most likely end up spending the money in the bank (or part of it) that was supposed to be used to pay for the item. So, she will end up spending more. Good thing she knows herself well and hopefully, she will not fall into any debt trap in the future.

For people in this category, having a credit card can be very dangerous indeed.

HSBC has recently launched a home loan package that is linked to an equity index, the Morgan Stanley Capital International Singapore Free Index. The Singapore Free Index tracks 27 heavy weight stocks in Singapore.

Under this new package, customers are charged an interest rate of SIBOR + 1.1% throughout the loan tenure.

With the special equity-linked feature, the customer will get a cash rebate of 0.25% (of the current loan outstanding amount) if the Singapore Free Index manages to appreciate 30% from its original price (known as barrier level). This 30% appreciation check is done once every quarter over a period of two years.

Thus, it is possible for a customer to get a maximum rebate of slightly less than 2% of the original loan amount. Practically, the amount of rebate will not hit the maximum possible as there is no guarantee the Singapore stock market can rally 30% from current levels in the near future.

A minimum loan size of $200,000 is required and the package is currently only available to new and existing HSBC Premier customers.

HSBC’s new home loan offer is available until Nov 30. To qualify for HSBC Premier, customers must maintain a total relationship balance of at least $200,000 with the bank.

While this is indeed an innovative idea by HSBC, I am not so sure whether consumers in Singapore are ready for it at this present moment, especially when people are been hurt in the past year by so many structured products that have gone wrong. I am not so sure whether there is a prospectus for this, but I don’t think anyone is about to start reading through a 100-page prospectus for taking up a home loan?

After a flurry of publicity as a result of a case reported in the newspaper about a woman who was slapped with a $17k liability after the loss of her credit cards, the Association of Banks of Singapore (ABS) recently announced steps to limit cardholders liabilities if their cards were lost or stolen.

This change in stand took a while to take place as the initial responses to the report by the ABS and banks did not hint of any changes to the procedures.

With effect from 1st November 2009, credit card holders will have a maximum liability of $100 if their card was lost or stolen. This is provided the loss is not due to negligence or fraud and is reported promptly.

MAS is also looking at the use of some authentication of online transactions using credit cards.

The positive change in policies meant that we are now finally on par with the practices adopted by other developed countries. Well, better late than later.

Kudos to the Straits Times and our other local press for highlighting the matter.