Consumers’ outstanding unsecured debt continues to rise
I refer to the article “Consumers’ outstanding unsecured debt continues to rise: CBS” (Channel NewsAsia, Oct 5).
It states that “In June, the number of consumers who missed two or more months of their unsecured debt payments rose 10 per cent to 85,352 compared to the same period in 2014.
These debtors represent five per cent of total unsecured credit card customers who had unsecured debt either in the form of a credit card, overdraft facility or personal loan.
Overdue balances rose to S$288,445,498, a seven per cent rise from last year and a 74 per cent jump from 2011.”
Missing 2 or more months’ payments is serious?
Missing two or more months of debt payments may indicate a likely default situation, incurring non-payment penalties as well as interest at as much as 25 per cent per annum – the beginning of the road to possible bankruptcy.
As I understand that the 85,352 who didn’t pay do not include those who could not pay licensed and illegal moneylenders – if we include these – are we looking at perhaps over a hundred thousand who may have difficulty paying their debt repayments?
As each defaulting debtor generally have family members who may also be affected – are we looking at perhaps around 400,000 people who may be financially stretched?
What about those not paying in full?
Why is there no mention in the subject news report about the number who were not paying their credit bills in full?
According to the Sunday Times news report “$10b in outstanding credit card loans by Xmas” (Dec 14) – “Around one in three cardholders – or nearly 540,000 people – were not paying their bills in full as of October”.
Has this statistic gone up too?
Has ‘rollover balances’ – bills that are not paid in full – also increased from the $5.4 billion reported last year? When you don’t pay in full and rollover your outstanding credit card bills – you are incurring normally about 25 per cent interest per annum.
What this may mean is that you may take a very long time to clear your debts.
More than 600,000 people not paying?
So, what about those who can’t pay their debts to licensed moneylenders, loan sharks, pawn shops, other loans like credit lines, banks’ personal loans, car loans, renovation loans, education loans, business loans, home and commercial mortgages, etc?
How many people in total are we looking at who may have a problem paying or incurring very high interest – more than 600,000?
So, all may not be well as we celebrate SG50.
Reciprocate trust with more transparency?
Since the people have given their trust and mandate – shouldn’t we reciprocate by being more transparent?
We should also spend more to help Singaporeans.
Leong Sze Hian
