1-6-2024 (SINGAPORE) Credit card billings in Singapore remained above the S$20 billion mark in the first quarter of 2024, despite a slight dip of around 5 percent from the previous quarter’s high of S$24.3 billion. However, concerning signs of financial strain have emerged, with credit card rollover balances and bad debts written off showing an upward trend, according to data released by the Monetary Authority of Singapore (MAS).
The credit card rollover balance, which represents outstanding balances subject to interest charges, crossed the S$7 billion mark in the fourth quarter of 2023 and rose further to S$7.33 billion in the first quarter of 2024, an increase of 1.1 percent from the previous quarter. Simultaneously, bad credit card debts, or debts deemed unrecoverable and written off, surged nearly 20 percent to S$89.4 million, reaching levels not seen since 2021.
The MAS data aligns with household balance sheet figures from the Department of Statistics (SingStat), which showed a 15.8 percent year-on-year increase in credit card debt to S$14.6 billion in the first quarter. This robust growth in credit card debt contributed to an overall rise in personal loans, including car loans and other unsecured loans, which edged up 0.2 percent to S$95.5 billion, marking the first increase since the fourth quarter of 2022.
As a result of the increasing personal loan burden, household liabilities, encompassing mortgage loans and personal loans, grew for the second consecutive quarter, rising 1.7 percent year-on-year to S$364.8 billion in the first quarter of 2024. This follows a 1 percent year-on-year increase in the fourth quarter of 2023.
Credit Counselling Singapore (CCS), an organization that assists cash-strapped borrowers with unsecured debt problems, has witnessed an uptick in the number of individuals seeking credit counselling support. Between November 2023 and April 2024, CCS counselled 867 borrowers, a 7 percent increase from the previous six-month period.
While the MAS has implemented safeguards, such as limiting unsecured credit granted to those earning less than S$120,000 annually to 12 times their monthly income, CCS General Manager Tan Huey Min emphasizes the importance of consumer responsibility. She advises consumers to create budgets, track expenses, save for emergencies and retirement, and spend within their means to prevent falling into deep debt.
