We’ve said on many occasions how the higher level of regulation in Singapore helps keep our relatively vibrant economy on an even keel.
The same can be said when it comes to personal debt, and that’s apparent when it comes to credit card holders. Already there are minimum wage requirements for card credit limits, and a bar on those with an unacceptable amount of personal debt.
That’s all there for a reason, and that’s to protect our economy, our banks and the customers themselves. The world’s major consumer problems are caused by bad debt, and it’s a game that Singapore doesn’t want to play.
Which is why Credit Counselling Singapore – the body that exists to help people with unmanageable personal debt – is raising its profile with a centralised plan to help credit card holders.
Unfortunately, no matter how many times we say it, people still don’t use their credit cards correctly. They’re a tool for handling money, just like your bank account, and should not be seen as a “free loan” to buy things you want know to pay off another day. The only way you should use your card is within your personal budget, and pay off every cent at the end of the month.
Sadly, the average outstanding debt owed by distressed debtors has actually risen in the ten years since Credit Counselling Singapore was set up, and now stands at nearly S$95,000. Numbers of debtors have also risen, with some 2,000 people to come through CCS’s doors this year.
However, rather than blaming rising debt, CCS chief Kuo How Nam says this rise is due to the organisation’s higher profile rather than an actual rise of indebtedness on the island. Bank write-off of debt – a far more accurate measure of personal debt – remains steady, Kuo says. “In good and bad times, however, there will always be individuals who will get into debt problems because of overspending or other factors like a bout of unemployment or medical expenses,” he said.
It’s not in CCS interests to comment on the country’s debt problems with any political bias, so we can assume that their announcements are generally free of spin. That means that talk of spiralling consumer debt in Singapore are more or less bunkum, and credit cards – for the 99.9% of us – remain a safe way to use your money.