Another reason why Sinkapore is screwed

[MarrickG]

Owe credit card $3000 but had to pay $1000 as interest. Worse than loanshark...why are they allowed like that? Because they pay tax.

Average S'pore debtor owes $70,000

EQUITY dealer Q. L. Loh, 25, was shocked when she found out she had to pay almost $1,000 in interest after a vacation abroad.

She had charged $5,000 to her two credit cards for the holiday but could fork out only $2,000 in repayment when the bill arrived.

Ms Loh paid the remaining $3,000 over the next few months and incurred an additional interest of about $100 each month.

"I felt the pinch only when (the interest) snowballed to $1,000," she said ruefully.

In the end, she took six months to clear her debt. Ms Loh is among a growing number of people who repay only a part of their debt instead of the full amount. They are known as "revolvers".

According to Credit Counselling Singapore (CCS), there were 417,000 revolvers in May, up 4 per cent from last June.

Targeting this group of consumers, CCS and Citibank Singapore yesterday launched a credit management programme called Use Credit Wisely. The initiative includes public talks, an information booklet and a phone helpline for Citibank customers to seek help in restructuring their debt.

Said Mr Anil Wadhwani, Citibank Singapore's head of consumer markets: "It's our responsibility to reach out to consumers and share good credit-management practices."

CCS president Kuo How Nam told my paper that the average debtor in Singapore has a monthly disposable income of $2,700 and owes seven creditors up to $70,000. That means he has exhausted his disposable income two years in advance.

In the first half of this year, CCS handled 227 cases - almost double the 120 debtors it saw in the same period last year.

Common causes of debt include overspending, loss of jobs or pay cuts, and business failures. Six in 10 debtors below 30 years old cited overspending as one of the main reasons for their financial difficulties, said CCS.

According to figures from the Monetary Authority of Singapore, banks here wrote off $16.4 million in bad debt in May, up sharply from the $9.4 million written off in June last year.

http://business.asiaone.com/Business/News/My+Money/Story/A1Story20090729-157676.html

 

[Leongsam]

Owe credit card $3000 but had to pay $1000 as interest. Worse than loanshark...why are they allowed like that? Because they pay tax.

The interest rates are clearly spelt out in the application form for any credit card. I assume the cardholder accepted the terms the conditions.

There is a simple solution to avoid paying the interest and that is to PAY IN FULL at the end of the month!

Can't afford to pay in full?... then don't spend the money in the first place.

Freakin' idiot sinkies:oIo:

 

[MarrickG]

LoanShark's rates and conditions are also explained to the borrower and it was agreed by both parties before it is executed. But, they're still illegal. Why? Because they dun pay tax.

Both charges exorbitant interest, the only difference is whether you let the government take a cut from your profit, which is tax.

 

[congo9]

If you know how to use your credit card well , you can have roll over of up to 55 days of intrest free credit !

Need to be wise when using credit issued by bank !

 

[MarrickG]

For me, best is to use cash.

 

[2lanu]

This is nothing new. 10 years back already such acticle had been happening around...

 

[commoner]

No money means no money, what 55 days roling credit,,,, no money spend 5,000 holiday and can afford 2,000,,,, cheapo,,,,

417,000 so called revolvers in singapore, meaning 10% of the total population, dunno how many % of working adults and % who has/will be jobless,,,,,, i wld suggest banks to get some revolvers and play russian roulette,

if die, bank claim 100% debt from insurance
if clear 1 round and quit, half debt clear
if clear 1 round and die, bank take half debt from insurance
if clear 2 rounds, all debts written off

 

[borom]

When you juxtapose the 417,000 (who can only repay part of their CC debts)
with the record HDB resale prices, the highest monthly sales volumes (in May 09 of 1,825 new homes) since URA started providing figures( in 2007), the STI breaching 2,600 point for the first time in 10 months, what conclusion can one draw?
I think many are sinking their monies into shares and properties and borrowing indirectly from their credit cards hoping to make a quick flip.If this is a significant number, the cheap money story that is used to explain the property run may not be so cheap after all.

When will the property and share bubbles start to burst?

 

[hillary888]

Ways to overcome credit roll slavery; From the Confessions of a Shopaholic - My favourite show.

Get a hold of yourself. Only you can take control of your spending habits – therefore your life. Believe you can do it, think it, and you will.

Avoid temptation. Don't pass by the part of the neighborhood where you know you'll be blinded by the window displays and end up walking in and going out with an armload of bags. Shield your eyes if you have to.

Get the support of your friends. Every time you have to go to the mall, bring a buddy with you. That way he or she can talk you out of (or bodily prevent you from) making another unnecessary purchase.

Leave your credit cards at home. These sneaky plastic objects fool us into not feeling the impact of our expenditures immediately. Thus, we buy more as compared to when we use cash. Better yet, destroy your credit cards and hurl them into a pyre! Ah, sweet freedom.

Make a list of the things you own. You can refer to this while browsing through a store. And if something catches your eye, brandish that mighty piece of paper to check if you already have one in your closet. You do? Then move on.