By Harsha Jethnani
YOUNGER Singaporeans appear to struggle with managing credit and
debt, payment data from last year suggests.
In figures collated by DP Credit Bureau (DPCB), Singaporeans
between the age of 21 to 29 years old saw defaults increase from
5.07 per cent in January last year to 7.16 per cent in December.
The rate of bad debts in the same group is at 130 per cent, higher
than the average rate across all age groups which is 3.11 per cent,
a statement from DPCB said yesterday.
Credit card defaults were the most common for all groups with
the 21 to 29 year olds leading the pack with a 7.54 per cent
default rate. Young married couples in the same segment had even
higher rates of defaults on debts than single counterparts, a
characteristic unique to only this age group. Across all other age
groups, couples had lower rates of default than singles of the same
age.
'Unlike their older counterparts, many younger people do not
have the financial strength and asset depth to deal with changes in
their circumstances,' said DPCB's managing director, Ms Chen Yew
Nah.
And since young married couples are more prone to defaulting on
payments, 'they need to reassess their spending plans and set
themselves more realistic budgets that they can stick to', Ms Chen
said.
The 50 to 59 year olds were found to be the biggest credit
spenders, mainly by credit card spending, but the group had a
moderate rate of bad debts - 2.19 per cent - lower than the 3.11
per cent average stated earlier. Those older than 69 has the lowest
rate of default, as they also spent the least using credit.
And where credit is concerned, 'prevention is certainly the
better way to go', Ms Chen said, unless consumers genuinely
understood how credit tools can be managed carefully.
