Credit Cards - Debts, Delinquency etc.

[millionairemind]

I am actually surprised to read that the rollover debt is around 15%...

Credit card loans up by S$840m in 12 months to Sep
Channel NewsAsia - Wednesday, November 19

SINGAPORE: Credit card loans in Singapore have grown by S$840 million in the year to September, up 18 to 19 per cent compared to the previous year.

The Monetary Authority of Singapore (MAS) is monitoring the situation closely and will maintain close contact with banks, said Finance Minister Tharman Shanmugaratnam.

The percentage of outstanding credit card balances rolled over for more than one month has remained around 15 per cent.

The charge-off rate, which measures credit card debt written off by banks and card issuers (as a percentage of the rollover balance), remains low at between 3 and 4 per cent.

Mr Tharman was giving these updates in Parliament in response to questions on Singaporeans’ debt accumulation in the past year in light of the flagging global economy.

He said the government is not too worried about the figures right now as they are in line with economic growth.

Source: CNA/ir

[helios]

I am actually surprised to read that the rollover debt is around 15%...

Credit card loans up by S$840m in 12 months to Sep

why?

too conservative??

[Musicwhiz]

I, on the other hand, am surprised the Government is "not worried". I thought it's pretty clear many people think credit cards can be used to fuel a consumption-driven lifestyle beyond their means.....

[winston]

Getting Rid of Credit Card Loans By Andrew M. Gordon

I wonder if I should be telling you this...

It's perfectly legal. And it could save you thousands - if not tens of thousands - of dollars. Well, I'll just tell you what my sister-in-law did and let you decide if this is for you.

My sister-in-law is starting her own business. Using her home as collateral (it's paid off), she got a business loan. But before she started to spend that money, she called up several of the credit card companies she held cards with. This is what she told them: "I'm starting a new business. I'm going to be spending a lot of money. I can't guarantee how much longer I'll be able to make my monthly payments. But I have some money right now. And I'm willing to pay off 80 percent of what I owe you today if you'll cancel my card in return."

Every credit card company agreed. And she used nearly $40,000 of her business loan to pay off $50,000 worth of debt.

Keep in mind is that this could slightly lower your credit rating. But if you're in a position to pay off 75-85 percent of what you owe on a credit card right away, maybe you should make a call. If they accept the deal, you'll not only be saving by not paying half the principal, you'll be saving all the interest that would continue to pile up in the account until you manage to pay it off. My sister-in-law is a fast talker, but not that fast a talker. If it worked for her, it should work for you too.

She wasn't lying to those companies. She didn't twist any arms. In fact, she told me that they jumped at her offer - and here's why...

Card companies put a value on your debt depending on your credit risk. Could be 40 cents on the dollar... or 60 cents... or 80 cents. If it's 60 cents and you offer to pay back 70 percent of your debt, that's a good deal for them, because they would be selling your debt on the secondary market for only 60 cents on the dollar. If it's 60 cents and you offer to pay back 50 percent, that's a bad deal and they would refuse.

The worse credit you have, the better deal you can negotiate. It's not unethical, it's a business deal. What's unethical is when a credit card company raises your interest rate by 50 percent even if you have a perfect payment record.

[blid2def]

Before anyone goes out to try that trick... make sure the bank you borrowed from isn't the card issuer as well.

[kennynah]

dont be silly....the moment you sound off your creditor about this possible default ...they will immediately cancel your card, get their legal councillor to issue you a writ of summon on the outstanding loan...dont try.... mai kay kiang...

[millionairemind]

I am actually surprised to read that the rollover debt is around 15%...

Credit card loans up by S$840m in 12 months to Sep

why?

too conservative??

Its way too high IMO. I tot this only happens in the US.

Or maybe I belong to another generation of Singaporeans where we pay our credit card bills in full every month. AMong my friends, I do not know anyone who owns any CC debts. (or maybe they too shy to admit when we discuss this issue.. )

[Musicwhiz]

Yep MM, I also pay in full every month. Too scared to owe the bank money as they charge amazing rates of 24% p.a., basically like legal loan-sharks lor....

As for my friends, I don't really know their credit card habits as we seldom discuss such matters. But I usuall assume most people pay off in full every month - who will be silly enough to pay 24% per annum to enrich the bank when it's hard enough getting 5-6% yield on shares ?

[bulltick]

I also asked my friends around and like few of us, all of them also pay in full amount. Hmm, think maybe majority of those late payments are from the 80s generation.... I belong to the 70s generation that listen to local chun bu "Xin Yao", like Liang Wen Foo's "new clothes where got old clothes nice".

[ucypmas]

It could be due to increased transaction volume resulting in higher amounts of debt outstanding. Increasing numbers of people like to put expenses on card these days to earn points etc. And most pay off in full when the bill comes due.