We refer to the article “More people missed credit card payments last year: Credit Bureau” (Channel NewsAsia, Apr 21).
More people can’t pay?
It states that “ A larger number of people in Singapore missed payments on their credit card bills last year as average card balances increased across all age groups, Credit Bureau Singapore (CBS) said on Monday.
According to CBS, 14.64 per cent of consumers missed at least one payment on their credit card accounts last year, up from 13.54 per cent in 2012. The figure was 12.55 per cent in 2011.”
- As I believe that there may be about 2 million credit card holders, out of the 8.1 million main cards and 1.6 million supplementary cards in Singapore
300,000 people can’t pay?
- does it mean that about 300,000 people did not or could not pay even a single cent on their outstanding credit card balance, for at least one month?
Isn’t this a very alarmingly large number of people?
24% interest plus penalty fees?
Moreover, when you miss a month or more on your credit card balance – you get charged typically about 24% interest a year plus a penalty charge of say $50 every month.
$250m bad debts written off?
Also, I understand that the above figures may not fully reflect the fact that $250.1 million of bad debts were written off in just the last 12 months.
So, the alarmingly large figures may actually be even worse.
As to “CBS also said average balance increased across all age groups, with men and women aged between 45 and 49 topping the spending chart with an average monthly balance of S$6,577 on all their credit cards.
The average balance per consumer was S$5,304 last year – a rise of 4.17 per cent over 2012.
The average balance refers to the amount spent on credit cards plus rollovers and financial charges.”
$5,5b rollover balance?
- It may be even more alarming that according to the Ministry of Finance’s statistics – Rollover Balances have increased by about 8%, from $5.1 to $5.5 billion in the last 12 months.
SY Lee and Leong Sze Hian