Finance charges and minimum credit card payments

Dear Experian,

I have a rather simple question. My wife and I disagree on whether a finance charge is already included in the minimum payment required. She says that we should pay both the minimum amount and the finance charge on time to maintain a good credit score. I say that you only need to pay the minimum amount on time to maintain a good credit score. Paying the finance charge is like paying more towards your balance that will shorten the life of your debt but it will not affect the credit score. Who do you think is correct?

- GMN

Dear GMN,

I don’t want to cause any marital strife, so I say listen to your wife. She’s giving you good advice, although you are technically correct.

A finance charge is the cost of credit including interest, cash transaction fees, late fees, and any additional charges that may be included under the terms of your contract. It is my understanding that lenders typically calculate a percentage of the amount you owe for purchases and add the finance charges to establish the minimum payment for that month.

You are correct that paying any amount more than the minimum due will reduce your debts faster. I hope you both will agree that paying only the minimum due will only reduce your debt minimally because a large part of it is going toward the finance charges and not toward the debt.

It can take many years to pay off even a moderate balance if you only make the minimum payment due. That’s where most people get caught.

If you pay the minimum due, you can eventually pay off your debt, but only if you don’t make any more charges. Your balance will continue to increase if you make charges and only pay the minimum due because you are continuing to pay only a percentage of the debt.

How does that affect your credit scores? A higher balance as compared to your credit limit is a sign of credit risk, so it will hurt your credit scores.

So, my advice is to take your wife’s counsel and pay more than the minimum due, even if you aren’t actually paying finance charges with the additional funds. It will get rid of your debt faster and help your credit scores in the long run.

Thanks for asking.

- The "Ask Experian" team

Mobility giant Jardine Schindler Group sees upward trend for Southeast Asia, Hong Kong, Taiwan and Macau

Chief executive Jujudhan Jena speaks about Asia’s long term growth prospects.

To most, mobility traditionally means the movement of people, but for Jardine Schindler Group (JSG), it is an essential requirement in the world in which we live and work. For a company backed by over 40 successful years of operations in the Asia Pacific region thattransports an average of 100 million people with its elevators, escalators and moving walkways on any given day. Jardine Schindler Group, which manages 12 markets in Southeast Asia, Hong Kong, Macau and Taiwan - sets its sights on the region’s long-term prospects.

We spoke to Jujudhan Jena, Chief Executive of Jardine Schindler Group to get his perspective on the importance of staying innovative in this industry, sustaining business leadership in the face of fierce competition, the challenges and opportunities faced, and find out the key defining management qualities that have helped this affable leader elevate the business to the next level.

Please tell us briefly about JSG and how it became the company it is now. 
Jardine Schindler Group (JSG) is a joint venture between Jardine Matheson Group and Schindler Group of Switzerland established in 1974. The partnership dates back to 1929 when Jardine Engineering Corporation became Schindler's sole distributor in Shanghai. In 1931 Jardine Engineering signed an agreement with Schindler for exclusive rights to sell Schindler lifts in China, Hong Kong and the Asia Pacific region (excluding Japan). The first lift was installed in Hong Kong that year.

Over the past decades, we have firmly established ourselves as a leading elevator and escalator provider in this region, thanks to a strong and dedicated organization, support from our shareholders and the trust placed on us by our customers.

JSG is headquartered in Hong Kong and currently operates in 12 countries within the region; including Hong Kong, Macau, Malaysia, Myanmar, Indonesia, the Philippines, Singapore, Thailand, Taiwan, Vietnam, Cambodia and Brunei, and employs some 4500 employees in a variety of specialist disciplines, ranging from engineering design to project management.

What do you consider are attributes to the achievements JSG has accomplished?
We attribute many of our core achievements and customer excellence best practices to a combination of factors that have shaped our business in the region.

JSG embraces a forward-looking attitude to stay ahead of the industry through developing proprietary technologies and products that are smart, safe, efficient, sustainable and cost effective for our customers. We invest in the skills and development of our people to meet the demands of urbanization and rapid expansion of cities.

In all the markets that we operate, we have a proven track record in the mobility business - frompowering the 490m high, 118-storey International Commerce Centre (ICC) in Hong Kong with state-of-the-art technologies;to supplying elevators and escalators to Changi airport,one of Asia’s busiest international airports - which is expected to handle 82 million passengers in year 2017.

JSG’s clear differentiation to continuously improve our environmental footprint of our products and processes like the first solar-powered elevator, the revolutionary PORT transit management system and more recently myPORT wireless application and Schindler’s iOS app FieldLink in partnership with Apple,further reaffirms our stand to truly bring innovation that leads to value creation –by offering tangible possibilities to the architects and designers of our future cities.

How does JSG manage all twelve markets under the group in Southeast Asia, Hong Kong, Macau and Taiwan?
At Jardine Schindler Group, we have multiple operations but share one ambition – our commitment to delivering outstanding customer service by continuously improving performance and value through technological innovation and enhanced processes, while maintaining high standards of quality and safety.

We strive to achieve this through our processes and supply chain management system; by working with a set of global standard of excellence defined at the Group level, we are able to reduce complexity, enhance quality and improve efficiency. The combination of Schindler’s Swiss commitment to excellence and Jardine Matheson’s true understanding and presence in Asia has helped us to effectively meet our operational needs across the markets and stay ahead of the curve.

What is your management style and how has the underlying philosophy guided you?
I am always seeking new challenges and assignments outside my comfort zone, and that was one of the key reasons I left a career in the consumer products industry to join Schindler

Following management trainings at Fortune 500 giants Coopers & Lybrand, Procter & Gamble and Kellogg’s, I embarked on my 17-year career journey with the Schindler Group holding strategic positions in key global markets. I joined Schindler in India in 1998, when the company started a greenfield operations and launched its business in India with a wholly owned subsidiary.

In 2001, I relocated to work on an assignment at the Schindler Group Headquarters in Switzerland. With a keenness to go back to the field, I was then transferred to the United States, where I worked on several challenging assignments and roles including leading the North and North East US Operations. It is also during this time when I served as the CFO of the entire US operations during the tough recession period. After almost ten years in the US, I took the role of Chief Executive of Jardine Schindler Group’s Southeast Asia, Hong Kong, Macau and Taiwan business in 2013, managing 12 markets in the region.

As a person and a leader, I am continuously evolving. My early influences at home and lessons on leadership at the boarding school where I was sent to early in my childhood serve as valuable experiences that have helped shaped my thinking. Some of the outstanding leaders, managers and professionals I have had the privilege to work with in my roles all over the world have also influenced and contributed to my growth as a leader and life at Jardine Schindler Group remains a continuous learning experience for me.

For me, challenging the status quo, being transparent and inclusive amongst other things have all worked well throughout my career. Most importantly in the end, it is only as a team that we are able to strive and aspire to achieve our ambitious goals!

What are the biggest challenges the industry faces in acquiring and retaining talent in Asia? What does JSG do to attract and retain talents in this highly competitive industry?
The success of JSG is built on our people, and more than any other factor, it is the skill, expertise and professionalism of our employees that ultimately determine JSG’s success across the markets we operate in.

The pursuit of our growth agenda requires people and a shortage of skilled talent pool is a challenge we are facing in the markets we operate in.

Another challenge we face is the adequate recognition of our industry compared to some of the other top of the mind industries like technology, consumer products, pharmaceuticals etc. The innovations and the use of technology along with the solid and long term nature of our business is somehow not very well known and perhaps there is room to better market ourselves to support our efforts in acquiring and retaining talent.

Just to share another perspective of our business - on average, 100 million people throughout the Asia Pacific region are transported by equipment supplied and maintained by JSG on any given day. This is a humbling figure that gives scale of our business, and is testament to the 40 years of successful operations within this region.

We are continuously working on various fronts and strategies both traditional and non-traditional to attract and retain talent. We are working on developing talent on five levels; from technicians to management, to support our growth aspirations as well as to develop future leaders of the company. In addition to offering competitive salaries we offer career growth opportunities, international exposures, challenging roles and extensive training opportunities to develop and enhance skill and expertise at all levels.

With all this and more, where having fun and celebrating successes goes hand in hand with challenging schedules and ambitious targets, we are trying to make JSG a desirable place to work.

Can you share some key trends in Asia, in regards to urban and city planning?
Asia’s urbanization is a spectacular ongoing phenomenon and we believe that Southeast Asia, China and India are still on the upward trend. Asian cities will continue to grow with vertical expansion, given the projected explosion of urban population in the next decades, and the shift in demographics where millions of educated young couples forming households, there will be ongoing demand for what we term mobility solutions -- moving more and more people in a faster, smoother and safe way. However, it’s not just a matter of quantity but also quality.

There is also a shift in the industry for more sustainable buildings in increasingly dense vertical cities.

What is your outlook for JSG for the next 2-3 years?
Since we started our business in this region 4 decades ago, we have always believed in the long-term prospects of the region. It has huge opportunities going forward.

With our long history and a strong presence in this region, we are well-positioned to provide for the needs of our customers, as we continuously improve the environmental performance of our products and processes, and stay innovative to meet the challenges ahead.

To support our growth ambitions, we are investing in building or expanding state-of-the-art training centres in Southeast Asia to further harness the competence of our employees and to assure we deliver what we promised. At the same time, keeping our eyes firmly on our future, we are working on apprentice programs by collaborating with local technical colleges around the region not only to strengthen our talent pipeline but also to support the communities we work in. Our regional training facility in the Philippineswas opened in June 2015, which will be followed by Malaysia, Vietnam and Indonesia in 2016.

These training centres are equipped with the latest training modules, elevator shafts, simulator facilities and digitized tools to train engineers and field technicians on the latest state-of-the-art installation methods, maintenance processes and safety standards.

With investments into the expansion of the training facilities and the introduction of a digital toolcase for our service technicians, alongside many other initiatives in the pipeline, we look to further strengthen our capabilities in the region and continue to make Schindler our customers’ first choice.

- See more at: http://sbr.com.sg/transport-logistics/sponsored-articles/mobility-giant-jardine-schindler-group-sees-upward-trend-sout#sthash.J9afRmzE.dpuf

Innovation, Customer Service Spark Surge in Demand at GGear

Sales of electronic products are surging in Cambodia and competition among brands is increasing as consumers increasingly opt for new rather than secondhand products.
For example, Cambodians spent more than $45 million on flat-screen televisions between April 2014 and March 2015, up about 40 percent from the year-before period, according to the Singapore office of global research firm GfK, which said the number reflected rising incomes among the middle class. GfK research also found that sales of new smartphones in Cambodia fell 6 percent in volume in the second quarter of last year, though their value rose 11 percent – from $76.4 million to $84.9 million. It said 211,000 units were sold in the second quarter of last year, down from 225,000 units in the second quarter of 2014, but the average price of new smartphones rose 18 percent.
Sok Piseth, chairman of GGear Cambodia, an authorized distributor for South Korean conglomerate LG electronics, spoke to Khmer Times during the LG InnoFest 2016 Asia in Seoul about shifts in consumer behavior, illegal imports and the outlook for the market in Cambodia.

KT: As an authorized distributor for LG Electronics how is your business here?

Mr. Piseth: We started our GGear in 2011 and received authorization to distribute and retail all of LG’s electronic products, including mobile phones, TVs, air-con units, washing machines and so on. We saw very strong support from our customers, especially for air-con units, washing machines and TV sets because we provide very good service. Moreover, LG products are innovative and that makes it difficult for competitors to compete. The products are very high quality and so is the level of customer satisfaction.

For example, our washing machines were ranked number one in market share because LG had done research to move beyond the conventional washing machine to make units that are innovative and difficult to compete against.

KT: What trends do you see in the market for electronic products?

Mr. Piseth: Sales are rising a lot over the last few years. We are seeing this the most in terms of smartphones. For sales of TV sets we are seeing more interest because of the innovations in terms of technology and design every year.  

I notice the trend towards buying new electronics products is accelerating fast and we are catching up with other countries in the region. So, I asked why demand for new technology is rising so fast. I think it is because the government has been making electricity more accessible in the provinces, especially rural areas. The government is also trying to reduce the cost of electricity and this is boosting demand for electronic products. At the same time the middle class is expanding and this is fuelling more demand.

KT: Although the middleclass is expanding, second-hand electronic products continue to take a significant share of the market. Are you seeing any acceleration in the desire for brand-new products?

Mr. Piseth: Yes, we are seeing more people changing from using old or second-hand product to brand-new ones. It is important to note that the price of electronic products keeps decreasing and that they are becoming more affordable. Also, new products can save electricity expenses because they use less power. They also have warranties. So, the behavior of consumers is changing. There is greater demand for new products and this is a good trend for the industry.

 
KT: As demand for electronics products rises, more illegal imports are also arriving. Is the government tackling illegal smuggling or enforcing more tax on imports?

Mr. Piseth: Of course, we see the government is strongly committed to enforcing tax on imports. However, although we see the government is working to reduce illegal imports, we still see many electronic products being imported illegally at some border points. This really impacts government tax revenues as well as legal importers.

It is not only my company but also other local companies that comply with tax policies that are affected. We are a legal importer that offers a lot of jobs for local people. We cannot compete with illegally imported products. I do hope that the government keeps enforcing the law to combat smuggling. We are happy to compete in a fair market.

KT: Since last year, the government has more strictly enforced tax collection and tightened collections on the import of electronics. Does this affect your business?

Mr. Piseth: Well, we see with AEC already in effect that duties on imported products from other ASEAN countries will fall to zero, so we ask why we still see illegal smuggling. For the import of electronic products, the government imposed import tax, special tax and VAT. When the AEC began the import tax fell to zero, but the government imposed a special tax of 10 percent and a value added tax (VAT) of 10 percent.

But when we import products from outside ASEAN, the government charges us 15 percent import tax, plus other taxes like VAT and a 10 percent special tax. So the tax payment is big. That is why there are illegal importers. They don’t pay these taxes and this makes it difficult for us to compete with them. We recognize that the government is willing to combat smuggling, but we still see illegal products on the market and this really affects us and other legal importers.  

KT: Have you ever raised the issue with the government?

Mr. Piseth: Of course, we have been discussing this a lot, especially with the Cambodia Chamber of Commerce which represents the private sector. A lot of companies are raising issues like this. And, we do see the government addressing these issue and we hope that we will see even more changes.

KT: What is your outlook for the industry?

Mr. Piseth: I see the electronics market continuing to improve with the country’s economy, people’s rising knowledge about new technology and rising incomes. However, the industry still sees some challenges like illegal smuggling, which affects legal imports. However, I do believe that the government’s efforts to crack down on illegal imports will improve the industry.