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MORE SINGAPOREANS IN DEBT TRAP

 

 

 

Big spenders chalk up debts of more than a year's salary from splurging non-stop
By Yasmine Yahya, The Sunday Times, 2 Nov 2014

It is so easy these days to shop online 24 hours a day, book a trip to Europe on an instalment plan or even make an appointment for cosmetic surgery in Seoul.

So easy, in fact, that more Singaporeans are falling into the trap of overspending and chalking up massive debts.

Just over half of those who sought help at Credit Counselling Singapore (CCS) last year landed in debt after splurging on brand- name goods, holidays and clubbing, among other things.

"Debtors usually have more than one reason. They may overspend and then become more vulnerable to get-rich-quick schemes, time shares or gambling, and one thing leads to another and the debt gets bigger and bigger," said CCS president Kuo How Nam.

"But the first cause is usually overspending because many people are living lifestyles not justified by their incomes."

There may be more than 40,000 people who owe more than a year's income from credit cards and other unsecured loans such as personal lines of credit or overdrafts.

The Monetary Authority of Singapore estimates that 3 per cent of unsecured credit borrowers' debts exceed their annual incomes. Based on Credit Bureau (Singapore) data showing that 1.44 million people had at least one credit card account at the end of last year, The Sunday Times estimates there to be 43,000 people who had debts of more than a year's salary.

Last year, the average debtor who turned to CCS for help owed $84,447 to seven creditors, but Mr Kuo said that figure is skewed by gamblers, who owe the biggest sums. Most others have debts in the tens of thousands of dollars, and they make up a big group.

"A lot of it has to do with peer pressure or their own values. Some people say they feel they deserve to indulge themselves - they've worked hard, so they deserve to take more cab rides or a holiday even if they can't afford it," he said.

"I asked a debtor once, 'Why did you carry on spending like this?' And the answer was that he was hopeful that some day his income would rise to a level where he could pay off his debt."

Financial advisers say that is a common problem.
SingCapital chief executive Alfred Chia said e-commerce has made it easy for people to use credit cards to shop round the clock, buying things they do not need. Even small purchases can add up.
Travel-related temptations are also pervasive, he noted.

"Some travel agencies have tied up with banks to offer trips to places like Europe on interest-free instalment plans so you can pay for your holiday over 12 or even 24 months," he noted. And if you do not make your monthly payments, you end up with interest charges and late fees.

Financial planner Damian Pang notices that people are taking more holidays, including "staycations" at hotels in Singapore.

"In the past, holidays were seen as a luxury but with so many budget flights now, people take two or three holidays a year. And in the past, we never had staycations. That's a norm now," he said.

He is also seeing more clients going abroad, especially to South Korea, for cosmetic surgery. "That's the power of K-Pop. These trips can easily cost $10,000," he said.

Financial advisers note that overspenders may not splash out on flying business class or staying at top hotels, but they do overspend on shopping or eating out.

"They travel to exotic places, buy branded goods and dine at Michelin-starred restaurants," said Eternal Financial Advisory chief executive Viviena Chin. "The temptation is very high when you are overseas to go crazy shopping. Things are nicer or cheaper and you think you might not come back again soon, so just swipe the card and forget about tomorrow."

Edited by pChou
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MORE SINGAPOREANS IN DEBT TRAP

 

 

 

Big spenders chalk up debts of more than a year's salary from splurging non-stop

By Yasmine Yahya, The Sunday Times, 2 Nov 2014

 

It is so easy these days to shop online 24 hours a day, book a trip to Europe on an instalment plan or even make an appointment for cosmetic surgery in Seoul.

 

So easy, in fact, that more Singaporeans are falling into the trap of overspending and chalking up massive debts.

 

Just over half of those who sought help at Credit Counselling Singapore (CCS) last year landed in debt after splurging on brand- name goods, holidays and clubbing, among other things.

 

"Debtors usually have more than one reason. They may overspend and then become more vulnerable to get-rich-quick schemes, time shares or gambling, and one thing leads to another and the debt gets bigger and bigger," said CCS president Kuo How Nam.

 

"But the first cause is usually overspending because many people are living lifestyles not justified by their incomes."

 

There may be more than 40,000 people who owe more than a year's income from credit cards and other unsecured loans such as personal lines of credit or overdrafts.

 

The Monetary Authority of Singapore estimates that 3 per cent of unsecured credit borrowers' debts exceed their annual incomes. Based on Credit Bureau (Singapore) data showing that 1.44 million people had at least one credit card account at the end of last year, The Sunday Times estimates there to be 43,000 people who had debts of more than a year's salary.

 

Last year, the average debtor who turned to CCS for help owed $84,447 to seven creditors, but Mr Kuo said that figure is skewed by gamblers, who owe the biggest sums. Most others have debts in the tens of thousands of dollars, and they make up a big group.

 

"A lot of it has to do with peer pressure or their own values. Some people say they feel they deserve to indulge themselves - they've worked hard, so they deserve to take more cab rides or a holiday even if they can't afford it," he said.

 

"I asked a debtor once, 'Why did you carry on spending like this?' And the answer was that he was hopeful that some day his income would rise to a level where he could pay off his debt."

 

Financial advisers say that is a common problem.

SingCapital chief executive Alfred Chia said e-commerce has made it easy for people to use credit cards to shop round the clock, buying things they do not need. Even small purchases can add up.

Travel-related temptations are also pervasive, he noted.

 

"Some travel agencies have tied up with banks to offer trips to places like Europe on interest-free instalment plans so you can pay for your holiday over 12 or even 24 months," he noted. And if you do not make your monthly payments, you end up with interest charges and late fees.

 

Financial planner Damian Pang notices that people are taking more holidays, including "staycations" at hotels in Singapore.

 

"In the past, holidays were seen as a luxury but with so many budget flights now, people take two or three holidays a year. And in the past, we never had staycations. That's a norm now," he said.

 

He is also seeing more clients going abroad, especially to South Korea, for cosmetic surgery. "That's the power of K-Pop. These trips can easily cost $10,000," he said.

 

Financial advisers note that overspenders may not splash out on flying business class or staying at top hotels, but they do overspend on shopping or eating out.

 

"They travel to exotic places, buy branded goods and dine at Michelin-starred restaurants," said Eternal Financial Advisory chief executive Viviena Chin. "The temptation is very high when you are overseas to go crazy shopping. Things are nicer or cheaper and you think you might not come back again soon, so just swipe the card and forget about tomorrow."

 

Pls don't overspend ah... spend within your means and be sure you will be able to pay off when using CC...

If not, the only one earning big bucks from your extra spendings, are the big ah-longs, aka the BANKS !

Be prudent, my advice to all our Bros here :))

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Pls don't overspend ah... spend within your means and be sure you will be able to pay off when using CC...

If not, the only one earning big bucks from your extra spendings, are the big ah-longs, aka the BANKS !

Be prudent, my advice to all our Bros here :))

Thats why don't apply for many credit cards

 

2-3 will do, as long as its Black card [lipsrsealed]

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