Rise in young credit card defaulters to be monitored: SM Goh

Rise in young credit card defaulters to be monitored: SM Goh
By Mustafa Shafawi | Posted: 14 February 2011 1849 hrs

SINGAPORE: Senior Minister Goh Chok Tong said the rising share of credit card defaulters among young adults in Singapore should be closely monitored.

Mr Goh, who is also chairman of the Monetary Authority of Singapore (MAS), said they accounted for 13.4 per cent of credit card defaulters in November last year, compared to 9.4 per cent in January 2008.

Young adults aged 21 to 29 have also contributed to the increase in "frequent revolvers."

Mr Goh said MAS has in place several measures to mitigate the risks of over-borrowing by individuals.

For example, MAS has set the minimum annual income requirement for credit cards at S$30,000 to ensure that credit cards are only issued to individuals who have sufficient financial means to handle them.

The maximum credit limit, including any other unsecured credit facilities that a financial institution can give to such individuals is limited to four times his monthly income. Financial institutions must conduct comprehensive credit bureau checks before granting individuals credit cards.

They supplement the rigorous credit assessments that MAS expects financial institutions to conduct before they grant credit to customers.

Mr Goh was replying to questions in Parliament from MPs who were concerned about credit card debts.

-CNA/ac

- wong chee tat :)