Credit Card Limitations

There are so many people in Indonesian who love credit cards.

According to news report, there are 14.3 million credit cards holders among our country's 240 million population.

This is obvious because credit cards provide possibility for people to live conveniently i.e. it provide them the chance to buy things by credit.

The bad thing about credit card is that it drove many of its holders into very consumptive people, it makes them buy things they want even though their financial position is weak.

I know some people whose monthly salary only enable them to pay the minimum payment limit i.e. 10% of the total credit card expenditures, therefore they facing trouble settling the credit and interest.

The most sadistic case happened last year when a holder of credit card issued by Citibank was beaten to death by debt collectors at the major U.S bank's Jakarta office.

In order to prevent credit card crisis, the Central Bank i.e. Bank Indonesia, issued regulation No. 14/2/PBI/2012 regarding Credit Card Transaction Procedures, among others as follows :
1) Minimum age of a holder is 21 (currently 17) years old.
2) Minimum salary of a holder is Rp 3 Million, maximum credit limit is 3 times the amount of salary.
3) Those who have salary below Rp 10 Million may only have two credit cards
4) Those who have salary above Rp 10 Million may get higher credit limit from the bank

The new regulation will become effective on 1 January 2013, with a two years transition period for banks to adjust their existing regulation with the said new regulation.

I hope that this new regulation would prevent any credit card crisis in the future.