GOOGLINGNEWS (ASIA), Swiping credit cards has become a habit for Indonesians. Rather than paying in cash, the public prefers the ease of using credit cards. According to Bank Indonesia (BI), credit cards are often used as an ‘instrument of debt’ by customers.
Puji Atmoko, the Chairman of BI’s Payment System Supervision Team, explained that the people who use credit cards don't always understand how they work. Lack of information and knowledge about the purpose of credit cards and how to calculate interest, have caused many people to become caught up in debt. “On the other hand, banks are too aggressive in marketing credit cards,” said Puji during a disscussion in Jakarta, Monday (6/2).
He said that every swipe of a credit card by a customer may potentially lead to bad credit. According to BI’s records, four percent of the 14 million cards owned by 7.5-8 million customers are involved in bad credit.
The central bank supports credit card business development. However, Puji asserted, if credit cards are misused it is easy to rack up debts. He said customers should be aware of the dangers of misusing credit cards and hopes cardholders use their cards wisely.
“We often receive complaints about credit cards. Customers are being billed, even though they have not made any transaction whatsoever. Interest calculations are also reported to be unclear and irrelevant to a transaction,” Puji explained.
To address this issue, BI issued Regulation No. 14/2/PBI/2012 on the Amendment to Bank Indonesia Regulation No. 11/11/PBI/2009 on Card-Based Payment Instrument Activities (Penyelenggaraan Kegiatan Alat Pembayaran dengan Menggunakan Kartu – APMK). The Regulation, which was issued on 6 January 2012, will implement the precautionary principle, consumer protection, and risk management.
The Regulation covers several important issues, such as: regulating maximum credit card interest rates; regulating credit card application requirements; regulating the precautionary principle and consumer protection; regulating cooperation with other parties on outsourcing as referred to in the Bank Indonesia Regulation on debt collection; regulating transaction security improvements in the form of transaction alerts to card holders; provisions on an interconnected system; and emphasizing BI’s authority over APMK permits and sanctions.
“The regulation explains that people with income of IDR 3 million to 10 million can not own more than three cards, starting January 2013,” Puji asserted.
The Regulation also forbids cardissuers from implementing a compound interest system. Moreover, pursuant to Article 17 (7) (d) of the Regulation, card fees, fines, and payable interest are not allowed to be included in interest calculations.
At the same event, the General Manager for the Indonesian Credit Cards Association (Asosiasi Kartu Kredit indonesia - AKKI), Steve Martha, estimated that the Regulation will cause the credit card growth rate to decrease from 10 percent in 2011 to five percent this year.
Steve explained that the drastic decrease will mostly be attributed to BI’s warning about minimum ages, minimum income, maximum credit limits, and limits on the number of cards one person can own. “The existing cards must be canceled, and you can’t have more than two issuers,” he said.
Regarding credit interest, Steve explained, the ideal rate should be around 2.5-2.75 percent per month, and should be implemented gradually.
Source : http://en.hukumonline.com
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