The Budget 2010 that was unveiled last Friday impacts me more than previous years Budgets. Here’s a summary of proposals that will impact me

The Good:

1. Increase personal tax relief from RM8,000 to RM9,000.
2. Increase EPF relief from RM6,000 to RM7,000.
3. Broadband relief of RM500.

I am in the 19% tax bracket. These additional reliefs will save me RM475 in taxes.

The Bad:

1. Service fee imposed on credit cards and charge cards. RM50 for principal cards and RM25 for supplementary cards.

I have 6 principal credit cards. I’m going to keep only 2 cards and terminate the rest. This means I still have to pay RM100 service fee.

Potentially Good:

1. The reintroduction of RPGT 5% beginning Jan 1st, 2010 irrespective of holding period. This will create an urgency for the sellers to sell their properties by end of this year. And since I am in the market looking for a property, I might come across a bargain.

Potentially Bad:

1. The Government proposed to use MyKad for petrol transactions to ensure that only the poor gets to buy subsidised petrol. Nobody knows yet how this will be implemented. I may have to buy unsubsidised petrol next year.

Common Stocks And Uncommon Profits by Philip A. Fisher is one of those good books but difficult to comprehend. It is good because Philip imparts his more than half a decade of experience investing in stocks to the readers. It is difficult to comprehend because the way the book is written …. is not like a conversational piece whereby the author is talking to the reader.

Philip highlighted the areas an investor should research into when choosing which stocks or companies to invest into. He goes on to describe how he went about researching these companies. Unfortunately, some of these techniques which he call “scuttlebutts” is difficult to apply by the layman investor.

Philip also described and explained what are the characteristics he look for in a stock or company to qualify as a “outstanding investment”.

A good thing I like about this book is that the reader is not bombarded with too many graphs and statistics.

Pros: The “scuttlebutts”, how to spot an outstanding investment.

Cons: Boring at times. Not easy to comprehend.

I had totally forgotten about a payment due on my credit card. I only found out about the late charge of RM5 when I logon to my account to check my statement.

I promptly made my payment by cash the next day, and called the customer service to have my late charge waived. I was glad to see the late charge waived two days later.

What I was worried most wasn’t the RM5 late fee, but the thought of having this late payment being recorded in my CCRIS report. The CCRIS stands for Central Credit Reference Information System is a database system containing credit information of borrowers in Malaysia.

When people apply for loans, the lenders will check the applicant’s credit history by referring to CCRIS. And a black mark in the applicant’s credit history could result in the loan application being rejected. Because I am planning to buy a property and apply for mortgage, I was very worried that this late payment will be recorded in my credit history.

I was given the “Debt Collection” department phone number of my credit card issuer to check if this will be recorded in my CCRIS. Fortunately, and I was surprised to learn, that late payments will only appear in a person’s CCRIS report if they are at least one month old. So, I was given the assurance that my late payment of a few days will not appear in my credit history. Thank God!

I was glad to see the late charge being reversed two days later.

I feel sorry for these people who resorted to colluding with merchants to take out money from their credit cards. These are people who could not control their spending. And colluding with these merchants to take out more money from their credit cards means digging bigger holes.Surely there must be a better way to reduce the interest payments without resorting to colluding with these unethical merchants.

First of all, why not choose to utilise the “zero balance transfer” promotion? The cardholder can transfer the outstanding balance of a credit card to another card and pay zero interest for a certain amount of time. I know not every card issuer have this promotion. And usually this promotion is offered as an incentive for new cardholders to sign up.

Next, can try to talk to AKPK. Perhaps they can help work out a repayment plan to pay off the credit card debt. Maybe they could even talk to the card issuer to have some of the charges and interest reduced.

Something strikes me as odd. These people can pay upfront 18% cash to the merchant. Seems to me these people are not cash strap. It seems to me that these people wanted to withdraw cash from their credit cards.

If taking a cash advance from their cards through the bank, they will be charged a 5% cash advance fee plus will start charging 18% interest on the amount outstanding immediately.

Instead, these people are willing to pay the 18% interest upfront to the merchant. And on top of that, another about 4% interest on the installment on the credit card. This clearly is a worse deal than taking out a cash advance directly from the card issuer. Because with the card issuer, the actual amount of dollar interest you pay will reduce as the months go by if you pay your installments monthly. The total amount of interests paid could be less than 18%.

Without analyzing the situation, options and financial impact properly, these people have dug a deeper hole. These merchants have no interest in helping the cardholders lower their interest expense. They are only interested in fattening their wallets.