APR – The Real Cost of Credit Card Annual Interest Rate

Read the basic difference between APR and AER before continue reading the below.

Refer to the annual interest charges for Maybank credit cards.

Assume you are one of those who constantly spend more than you earn and frequently misses your payment, putting yourself in Tier 3 bracket of 17.5%.

Say, you have outstanding balance of RM 10,000, so you’ll think (I did previously) that, even if I don’t pay a single cent for the next 12 months, by the 13-th month, I would need to pay 117.5% x 10,000 = RM 11,750. Or, you think, every month, I will be charged a monthly interest of 17.5% /12 = 1.4583%

Not quite that simple. Confused? Let’s solidify the concept with an example below.

Remember, you get your credit card statement monthly – your outstanding balance plus interest incurred previously will be carried forward to the subsequent month. That means, the compounding period is monthly!

In other words, as you are well aware, for the first month, the outstanding balance plus interest incurred is RM 10,145.83. On the second month, the 1.4583% interest will be charged on RM 10,145.83 brought forward from the first month. See the impact of compounding over here?

Effectively, once you want to settle the balance outstanding after the 12th month, you will be paying MORE money than the advertised interest rate of  17.5% due to compounding, because 17.5% is really the APR!

The actual interest rate you will be paying is the AER. For APR of 17.5%, the AER is 18.974%!! See APR to AER conversion here.  Or in monetary amount, RM 11,897.40 instead of RM 11,750.00

Still don’t believe me? Read this and compute FV in excel with the following inputs: nper = 12 months, 0.014583 for rate and PV = -10,000. Put zero for Pmt. The concept is similar.

So, why banks quoted you 17.5%?

Simple, because it is a lower number between the two. When you are the bank’s debtor, bank need you give you the disguised impression that you need pay less than you are actually paying. This is marketing – they are not actually lying to you, just that it’s not the whole truth. You have nothing to blame but your own ignorance. Different countries have different rules and regulations in place to combat some of the unscrupulous activity surrounding quoting rates that has arisen in the past; however, there is no better insulator against these ruses than proper financial knowledge. If you know of any bank which quote AER instead of APR for credit card interests, let me know – I am pretty sure their credit cards product would not be selling too well even though they are telling the truth to customers!


(Retrieved from http://www.howtofinancemoney.com/ article on 28/01/2012）

青年世代與未來part_3

蔡主席分享自己在美國、英國留學的經驗，以及成為政治人物後如何自我調整的過程。她特別強調「世代責任」的概念，提醒新一世代必須提升競爭力，從差異中創造價值，並且跨領

­­域學習、跨文化接觸，以面對全球化時代的各種挑戰。

青年世代與未來part_2

蔡主席分享自己在美國、英國留學的經驗，以及成為政治人物後如何自我調整的過程。她特別強調「世代責任」的概念，提醒新一世代必須提升競爭力，從差異中創造價值，並且跨領

­­域學習、跨文化接觸，以面對全球化時代的各種挑戰。

青年世代與未來part_1

蔡主席分享自己在美國、英國留學的經驗，以及成為政治人物後如何自我調整的過程。她特別強調「世代責任」的概念，提醒新一世代必須提升競爭力，從差異中創造價值，並且跨領

­­域學習、跨文化接觸，以面對全球化時代的各種挑戰。

这是一个给青年们聆听的很好演说

给蔡英文的一封信

我是林欣，来自马来西亚。我长期以来关注台湾民主及政治的发展，也是支持蔡英文当选总统的坚定支持者。虽然我没有投票权，但我心目中的这一票是投给蔡英文。支持蔡英文，是我的骄傲。小英主席让我们看到了不一样的民进党，不一样的台湾选举。小英主席为党，台湾无私的付出，我们都看在眼里。您不只是台湾的宝贝，也是大家的骄傲！您已经为全球华人写下了一项新的历史，也为全球华人社会出现第一女总统带来希望。您十年政纲的理想，台湾共识，您所具备总统的高度，视野，承担和无畏财团的压力来选择与人民站在一起，是令我们敬佩的地方。在台湾，也只有您有这样的特质，也因为这些特质，让我们看到了不一样的未来。

这次的败选，我们大家都很痛心，但这不代表您的失败。我们虽然痛心，但我们不绝望，因为我相信只要台湾还有小英主席，我们就有希望。我真的非常希望您能继续领导和改革民进党，并参选2016年总统大选把台湾带向一个光明的新世代。我非常地坚确相信，2016年，我们一定可以走完最后一哩路。


小英总统加油！加油！加油！


天佑台湾


                                                                                                                            


                                                                                                                                    林欣笔
                                                                                                                             

Aspiration as a Malaysian

Our shared aspiration are simple: to have a better life, our young generation hold a skilled, well-paid and quality job; every family can live in an affordable, comfortable home; less pollution environment, every young person can develop himself fully and pursue his dreams; every senior citizen can stay active and to live with dignity. To achieve this, our economy must grow, this is the basis to improving our lives. Our economy is grow every year, but why our common aspiration is still inaccessible? Is there something wrong with our country and government mechanism.

Government always say, Malaysia has a strong and dynamic economy with many career opportunities for her people. Is our work fulfilling? How can we achieve a good balance between work and personal life? What are the trade-offs? How can we cooperate to make our country and city a great place to work and live? Is our city virescence? Do we have a wide range of efficient and comprehensive policies and programmes to enhance our opportunities and environments in Malaysia? A well liveable city and country should be a green city, has strong education system, well planned public transportation system, less pollution, an efficient and caring government, gracious society, culture of social support among the people in our community and fair and transparent government mechanism. We have a strong and vigorous community, but we have a third-rated government to enforce the effective policies and programmes to realize the whole Malaysian aspiration.

反垄断法

马来西亚至今竟然连反垄断法都没有，连泰国，印尼与菲律宾都比不上。没有反垄断法，就是让反竞争的不当行径盛行，结果呢？就是高成本，高费用，低效率，底生产力的企业做大。

为什么一个自称以民为先的政府连个基本反垄断法也推不出？因为它搞的民营化实际上就是把有利可图的公共企业私”盈“，”囊“化 （pocketization)，”海盗“化 （piratization),把无利可图的垃圾留给我们的凯子政府.（KL Rapid LRT 就是最好的例子，当然还包括TNB等等）。

这些政治人物的口袋饱满的时候， 他们还会推反垄断法才怪!
...
这就是”乌”统经济的政治恩庇和特性。。。。

党职，官职不分 + 私”盈“化，就是加剧政企不分和政治性企业。政治干预企业，捣乱经济规律的运作。

什么搞民营化的宗旨是减轻政府的财政负担，强化竞争，提升服务效率，抵制具有垄断倾向和官僚作风的公共部门。这些理由听起来还挺有理的，可是结果和人民的感受呢？

所反映的结果不是证明政府的无能，就是政策的执行力不佳和失败！连个官员家族的企业利益都可以撇成家族和部长之间毫无利益。相信的才是笨蛋！

这个政府，还谈什么经济改革？先改改巫统败坏门风的做法吧！