Credit – what is it good for?

Young adults are gaining easier and earlier access to credit with new products such as Buy Now Pay Later, but may not be getting to grips with the consequences

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Benjamin Cher

Published Fri, Feb 24, 2023 · 04:00 PM

Credit card penetration in Singapore is high: Credit Bureau Singapore says over 2.4 million unique entities or persons have more than four credit card accounts. PHOTO: BT FILE
Late payments on unsecured credit cards are on the rise in the 21-29 year old demographic, shows data from Credit Bureau Singapore. PHOTO: BT FILE
Associate professor Pearpilai Jutasompakorn of Singapore Institute of Technology notes that having different family and education backgrounds equips graduates with differing levels of financial literacy. PHOTO: SIT

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CREDIT is becoming widely available in Singapore, with a plethora of products offered from traditional unsecured credit cards to alternative lines such as Buy Now Pay Later (BNPL).

Yet credit is something of a double-edged sword. It helps those with cash flow issues and rewards good repayment behaviour with better interest rates for loans. It’s also an easy way to rack up crushing debt with long-term consequences for future financial decisions such as buying a home.

Statistics from Credit Bureau Singapore (CBS) shows that 82 per cent of the 512,084 new credit applications in the fourth quarter of 2022 were for credit cards, with the rest for personal, real estate, motor vehicle loans and overdraft facilities.

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