Only 0.2per cent of Singaporeans default on credit card debt!
And here’s the good news: Credit card users are, in the main, among the best in the world had using their credit cards and avoiding debt.
According to figures released in October, credit card default rates are at a staggeringly low 0.2 per cent. Finance Minister Tharman Shanmugaratnam, in a written answer in parliament, went on to elaborate that these levels do not significantly change across all age groups, dispelling the myth that young people are finding it easy to fall into debt.
Breaking down the figures, the minister said that this less than 0.2 per cent actually amounted to just 250 people seeking help for the monetary woes in the first half of the year.
Mr Tharman’s figures come just as Singapore’s central bank tightens the rules on personal finance in order to prevent people from borrowing beyond their means, something the government want to see reduced in a bid to reduce the risk of a local debt crisis.
We’re certain that these low rates are partially cultural – we’ve got responsibility running through our national DNA – and partially because of the relative financial stability we have while the rest of the world goes crazy for debt, collapsing under the weight of money owed. Sure, we have tight financial regulations in Singapore, but we have them for a reason, and they are clearly paying off when it comes to personal finance.
However, to make sure that Singaporeans only resort to responsible lending, new rules on credit cards and personal loans due to arrive next June mean that borrowers will not be allowed debts greater than their annual income. This closes a loophole where a customer can switch banks knowing that the new institution does not konw the level of debt they have elsewhere.
While these rules are necessary to prevent a small minority getting into debt beyond their means, it is comforting to know that this will have virtually no effect on the 99.8 per cent of Singapore citizens who manage their financial affairs responsibly.
Article by Jason Taylor – [email protected]