22 June 2007

Now everyone can have a credit card

I found this news article dated 21 June 2007 from the online version of International Herald Tribune. Currently, the only prepaid credit card that I know of locally is the AmBank NextG prepaid Mastercard. It seems the people behind the somewhat successful AirAsia & Tune Hotels will be offering prepaid Visa credit cards that can be loaded with credit up to RM10k.

Besides allowing those who cannot qualify for a normal credit cards to enjoy offers given to credit card holders, be it when purchasing goods at shopping malls, via mail order or online, it's a good way for those with debt management issues to manage their finances since you can only spend what you have (similar to debit cards, which are not widely accepted in this country). Further, it reduces the need to carry big amounts of cold, hard cash & hence, the risk of losing money from pickpockets or robbers (just don't write your card's PIN number in the card itself & commit financial suicide). A prepaid credit card can also be considered as a training or try-out card before people decide on whether to get for themselves a normal credit card.

For me, a charge card will be sufficient for debt management since if we don't settle the outstanding amount within the stipulated period, the card will be deactivated & reactivation will incur a fee. Besides that, I have more flexibility with a charge card than a prepaid credit card.

Enjoy the read.

No-frills financial portal to launch prepaid credit cards in Malaysia
The Associated Press
Published: June 21, 2007

KUALA LUMPUR, Malaysia: An online financial service company said Thursday it has obtained approval from Malaysia's central bank to issue prepaid cards, which are similar to credit cards but have a stored value.

Tune Money Sdn. Bhd. said its no-frills Prepaid VISA cards will be unveiled latest by November after another product, a low-cost insurance and unit trust sale on the Internet, is launched. The cards will be issued in collaboration with Visa.

Tune Money is 45 percent owned by Tune Venture Sdn. Bhd., a private company in which Tony Fernandes, the founder of budget airline AirAsia, has a majority stake.

The prepaid Visa cards, which will have a stored value of as much as 10,000 ringgit (US$2,900; €2,260), will be targeted at low-income earners who are unable to get regular credit cards because banks don't recognize their creditworthiness, said a Tune Money statement.

In Malaysia, credit cards are issued only to those who earn at least 1,500 ringgit (US$440; €340) per month. Many others don't get a card because they are afraid of falling into the debt trap.

"Our card addresses both problems. Since you pay upfront, there is no credit risk and hence, no minimum salary requirement," Tune Money Chief Executive Officer Zafrul Aziz was quoted as saying in the statement. "And, since you pay upfront, there is no possibility of landing yourself in debt with our card," he added.

Tune Money says that people without a credit card — at least 70 percent of employed Malaysians — are deprived of all the cheap deals available online such as discounted tickets, holidays and hotel rooms.

"It's ironic that those who most need the savings you can get from the deals online have no access to it because they do not qualify for a credit card," Zafrul Aziz.

"Our card will essentially democratize the system. It will allow all sections of society to enjoy the benefits of the buying online," he said.

Bank Negara, the central bank, has also given Tune Money approval to allow transfer of funds overseas using the prepaid Visa cards.

The personalized card will look exactly like a credit card and be accepted at all locations that accept the Visa brand. This will differentiate it from the debit cards on the market which can only be used at a limited number of terminals, the statement said.

Till later, live long & prosper.


  1. This VISA prepaid credit card is targeted to low income earners who otherwise are unable to get regular credit cards and yet have a stored value of RM10K? The mind boggles.

  2. Well, RM10k is the max amount of credits the prepaid credit card can carry aka the max amount the card holder can load into it. This is imilar to the prepaid mobile phone SIM cards that can hold up to RM1k airtime credits (last time I read about it). Just like the prepaid SIM cards, I don't think many will load their prepaid credit cards to the max.