Consumers needs education on credit card usage<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
As a young professional who has been working for only two years,
\nDewi, a manager of a small bookstore here has three silver credit
\ncards placed neatly inside her wallet.<\/p>\n
\"I have lots of needs that I cannot cover with cash,\" she said
\nexplaining why she has more than one credit card, citing
\nentertainment expenses and electronic gadgets to equip her room
\nas among those needs.<\/p>\n
These days however, with her spiraling debts, she regrets
\napplying for more than one credit card, as she can only manage to
\npay the minimum amount required out of her total debt.<\/p>\n
\"What scared me the most was when a bank debt collector came
\nto my house,\" she recalled.<\/p>\n
Such a phenomenon is common nowadays, notably in the urban
\nareas. Recent data shows that the number of credit cards has
\nreached 7.5 million, with a total of 12 million transactions
\ntaking place per annum worth up to Rp 30 trillion.<\/p>\n
Of the total, the non-performing loans currently reach about 5
\npercent.<\/p>\n
Indonesian Credit Card Association (AKKI) chairman Budi
\nSetiawan projected an increase of 20 percent in credit card
\nholders this year.<\/p>\n
The soaring number of credit card holders is attributable in
\npart to the robust demand, in addition to the fact that most card
\nissuers -- mostly banks -- are seemingly eager to offer various
\nattractive incentives to net new card holders. Easier application
\nrequirements, relatively low interest rates and a low monthly
\nminimum payment charge, are all among the benefits offered.<\/p>\n
Unfortunately, consumer complaints have also been increasing
\nin tandem with that.<\/p>\n
The Indonesian Consumer Foundation (YLKI) said that numerous
\npublic complaints in relation to credit cards have been reported,
\nwith the number on a steady rise and debt collecting problems
\ntopping the list.<\/p>\n
\"Debt collecting activities are not stated on the initial
\ncontract signed by card holders,\" (YLKI) chairwoman Indah
\nSuksmaningsih said.<\/p>\n
\"We felt the need to mediate between banks and their consumers
\nto solve problems concerning credit card usage by campaigning
\nabout the handling of consumer complaints,\" she said, referring
\nto a plan by the foundation to collectively report all complaints
\nfrom credit card holders YLKI has received to Bank Indonesia's
\ncredit bureau.<\/p>\n
The campaign, to be conducted in cooperation with the central
\nbank, would start on March 1 and continue until May 15, Indah
\nadded.<\/p>\n
Bank Indonesia director of accounting Mohamad Ishak said last
\nweek that the credit bureau would act as a mediator for both
\nparties.<\/p>\n
\"BI will also urge banks to set a minimum monthly payment of
\ncredit cards at 10 percent of the total bill,\" he said, adding
\nthat not many card holders realized that the multiple interest on
\ntheir total debt would in the end accumulate to a huge amount.<\/p>\n
Aside from providing a mediation board, YLKI and BI also plan
\nto set up a mechanism by which banks, and other card issuers,
\nwill provide informative messages for consumers to use their
\ncredit cards wisely.<\/p>\n
\"Sometimes it is not clear whether the banks are educating
\ntheir customers or merely promoting themselves,\" Indah said. She
\nadded that sometimes banks issued credit cards to people who do
\nnot have the financial resources needed to own one. (003)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/consumers-needs-education-on-credit-card-usage-1447893297",
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"sponsor": "Okusi Associates",
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