Singaporeans feeling the pinch of Credit Card Debt

As Malaysians wait with bated breath to see what other damage the Budget 2014 will inflict on their already tight spending, it appears Singapore isn't safe from the debt crunch either.

It would appear that Malaysians aren’t the only ones in debt trouble. The Star Newspaper reported that our neighbours in the South are also struggling to make payments with 12.7% more not making even minimum payments on their unsecured debt as compared to last year.

The Credit Bureau of Singapore (CBS) said that the total had hit 62,830 customers compared to 55,726 customers from last year.

Unsecured debt includes credit cards, overdrafts and personal loans.

The total amount of unsecured debt in the country also rose to S$230.7mil (RM591mil) from S$212.5mil (RM545mil) last year. Consumers are now racking up a total of S$8,030 (RM20,500) per month on average in credit card and overdraft debt.

This rise has caused the Money Authority of Singapore to launch new rules on unsecured loans in early September 2013. The new rule prevents financial institutions from giving more unsecured loans to people whose unsecured debt totals more than 12 months of their income for 90 days or more. Bad news for credit card users constantly carrying a balance!

But if you thought that the statistics could be attributed to young, flashy Singaporean executives who crave the lavish lifestyle of cocktails on the rooftop of Marina Bay Sands and branded togs from the shopping mall below; think again. CBS research discovered that the highest number of delinquent paymasters come from the ages of 35-39. CBS executive director William Lim said that major financial commitments such as a first house or child could be what caused the people in that age bracket requiring more financial assistance.

So, they needed the debt to raise a family and keep a roof over their heads? Sounds flashy. Hopefully, the usual naysayers who lament the glamourous, rich lifestyles of credit card debtors will take note.

It would appear that struggling Malaysians are not alone in being unable to make ends meet due to ever rising inflation and costs of living.

*Image courtesy of Andrew McMillan at Wikimedia Commons.


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