Credit card bad debt written off by banks up 59%
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By Hetty Musfirah | Posted: 09 October 2010 1638 hrs
SINGAPORE: Bad debts written off by banks for credit and charge cards went up from about $115.4 million in 2008 to $183.9 million last year, a rise of nearly 60% in a country with only 1.2 million credit card holders.
The reason for this, observers say, is due to the financial crisis in 2008.
"As people's income get impacted, they lose their jobs...they start to draw down from their savings, and then their credit card limit, and then as a result, their debt will start to increase, before you know it, they get into trouble and they get into difficulty in paying, so you will see the spill over in 2009," said Kuo How Nam, president of Credit Counselling Singapore, a charity dedicated to credit counselling and debt management.
As the economy bounces back to health, the financial status for most of the credit card holders in Singapore have also improved, with statistics indicating that Singaporeans are paying back faster despite spending more this year.
The proportion of those who do not pay on time has also gone down.
"The delinquency rate has actually been dropping, so at this point in time, we are seeing a delinquency rate of 4.95%...so this is an improvement compared to previous years," said Ms. Lily Tay, business development manager with Credit Bureau Singapore.
While the number of people seeking help at Credit Counselling Singapore nearly doubled from 2008 to 2009, numbers have stabilised since, with about 745 people for the first eight months of this year compared to more than 1,200 people last year.
According to Credit Counselling Singapore, based on the current trend, the estimated number of people seeking help this year may be around 1,118 which is slightly lower than the total of 1,285 in 2009.
Credit Counselling Singapore says its records have also shown that as more younger consumers acquire credit cards, the roll over amount will continue to rise as the younger generation tends to spend rather than save.
Observers say there's still room for banks to exercise greater responsibility when educating consumers on the use of credit cards or managing their credit card debt. For example, being more transparent about charges or fees incurred.
-CNA/ac -
Times are bad.
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times only look good, but it was never good. lol.
i hope more of such truth surface. cause those what low unemployment rate, GDP increase and etc craps are all tailor made by government. those negative one all never post. the fact is singapore now doesn't not have a growth in the economy. It's all the government's making to show singaporeans that recession is over.
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Many pple still use credit card to purchase items and in danger if it exceeded ones salary.
Need to have self control.
Carry 1 or 2 cards will do.
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i bet the excuse is the name year in year out.
