Everyone knows that credit cards charge exorbitant interest rates right? So why? Who would be willing to go into credit card debt? And how bad is it?
I've been trying to find data online about credit cards in Singapore. It's not particularly easy to find.
A lot of estimates here cos, sometimes the sites don't really define the data well.
From MAS
Total card billings, I read this as total charged at the end of the month is $4,529,000,000.
Rollover balance at the end of the month is $5,000,000,000.
This is quite insane really.
This means that every month, the rollover balance is MORE than the amount that everyone spends.
Unless I'm reading this wrongly.
So if we average this out, for each card,
Every month, the month end bill comes to $588. Not too bad...
But at the same time, the month end rollover is $649.
This means that on average, the rollover at the end of the month is larger than the spending for the month!!!
More data...
Based on this Straits Times article, the number of credit cards an average card holder owns is 4.
I take this to mean that out of the 7.7 million cards, there are approximately only 1,925,000 people owning cards.
So I assume, that each of these people spend around $588 x 4 = $2,352 per month
and rollover $649 x 4 = $2,596 per month
Based on this Business Times article, about 64% of Singaporeans pay off their bills in full every month. Date of this data is unknown cos in the article they mention so many dates, I don't even know which is for which data.
Anyway, more estimations, this means that 36% of Singaporeans do NOT pay off their bills in full every month, so out of 1,925,000 card users, 693,000 people do not pay up their bills in full.
I take these folks as the rollover people... So this means that the rollover balance of $5 billion should be attributed to these people. Which results in an average of $7,215 debt sitting on these people's credit cards.
Based on this TNP article, some stats from Credit Bureau Singapore in 2015 can be found at the bottom.
Delinquent debtors are 6.3% of credit card holders.
People who pay minimum sum are 35.2%.
Ok so what does this all mean to you?
Well... my old department has 100 people, but they probably all own credit cards.
Let's say 100 random people in Singapore, assuming Singapore population is 5.6 million, this means around 28 of them will own credit cards.
Around 10 of them are paying the minimum sum, 1-2 of them will be delinquent.
Those numbers still mean nothing to you? When I wrote them, it meant nothing to me, so I suppose you think so as well...
How about this... you meet 6 new people at a gathering in office. It's likely that all of them own credit cards right?
2 of them will have an outstanding credit card debt.
One of them owes less than $7,215.
The other one, owes more than $7,215.
If this still means nothing to you... then... you have 3 friends, 1 of them owe the credit cards money.
And I hope this 1 person is not you.
But actually, as I look at these numbers... I'm thinking, hey maybe the consumerism and debt problem isn't so big. It really isn't as bad as it seems right.
Look... Singapore has something like 5.6 million people.
Around 650,000 people have some debt problem.
Means 5 million people are doing pretty ok right?
And most of them don't even have a credit card. So what's the big deal?
In large numbers, it doesn't seem like a very big issue. But if we look at it from a very human perspective, it becomes a very real issue, especially for the families living in a bad financial condition. On a HDB floor, each floor has around 8 units? Something like that? This means that 1 of the families on the floor that you are living on has a debt issue. They could be paying only the minimum sum or delinquent.
I know of 3 people close to me who used to or still have debt issues. And the thing is... most of us don't even know that they have this problem. They seemed so normal all the time, yet at home, I'm sure they are super stressed over their ever increasing debt. More often than not, they are in denial. When asked how much their debt is, they don't know. They hardly look at their credit card bills cos they don't want to see the number. Cos the number is just so big, it's like an surmountable mountain. It's actually very scary. And more often than not, they still keep their lives hidden, so outwardly, they still show that nothing is wrong and continue their normal spending patterns. It's quite sad actually.
I do have some empathy... I mean... yes they got themselves in that situation. And I hope they can get themselves out... IF they adjust their spending or make changes... I think it's honorable for them to want to get themselves out of trouble. But if they don't admit it and keep on digging the hole... then... sigh, I do feel sad for them but... can't help someone who isn't willing to help themselves.
Hope none of you are one of the 35% who are keeping a credit card balance at the end of the month.
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