Overall, unpaid balances were at S$9.98 billion as at October, the latest month for which figures are available. That is a jump of more than 70 per cent from S$5.8 billion for the same period in 2009, just five years ago.

December, with year-end festive shopping and holidays, has always been the month when people use their credit cards most.

Bad debts written off by banks this year rose by nearly 50 per cent to S$225 million by October, compared with S$152.9 million in the first 10 months of 2009.

And rollover balances - bills that are not paid in full - have also jumped 50 per cent to S$5.4 billion over the same period. Several banks recently raised interest rates on credit card bills.

According to figures from Credit Bureau (Singapore), there were nearly 1.58 million credit card consumers as of October, up from 1.2 million in October 2009.

Around one in three cardholders - or nearly 540,000 people - were not paying their bills in full as of October.

And 3 per cent of cardholders - or around 47,000 people at last count - have debts exceeding a year's salary.

Although this group is a concern, experts The Straits Times spoke to said what the data shows most clearly is that more people are using their credit cards for many more transactions than in the past. 

These days, plastic is used to pay not only for big purchases but also grocery shopping and eating out at modest restaurants, as well as for purchases overseas.

 "Spending more is not the same as overspending," said Kuo How Nam, president of Credit Counselling Singapore which helps people deep in debt to draw up instalment plans to repay what they owe.

Significantly, the proportion of credit card holders unable to pay their bills in full has remained largely stable - at around one in three - over the past five years.

Bad debts written off as a proportion of rollover balances too have remained stable at around 5 per cent over the past five years.

"The percentage of loans going bad has remained stable, so that is a big relief," said Kuo.

But still, the numbers of those who do not pay in full or those who default on at least a month of payments need to be monitored carefully, he said, adding that MAS was already doing so with more curbs coming in next year.

Those who owe more than a year's salary will have their credit facilities suspended and be asked to pay off the excess by next June, pointed out Kuo.

"They must update their income information with the banks and also immediately take action to bring down their debts to avoid their credit cards from being suspended," he noted. 

Dr Siriwan Chutikamoltham, senior lecturer and director of banking and finance at Nanyang Business School at Nanyang Technological University, concurred that the overall credit card situation did not warrant red flags. However, more nationwide data was needed on those who have difficulty paying, she said.

It would, for instance, be useful to know the detailed demographic profiles of those who defaulted on the credit card loans and also the reasons for their default.

"It is important that you identify the type of credit card holders that are susceptible to problems so specific policy can be devised to target them," she added. For example, if a particular age group had a higher default rate, then banks should set a more stringent credit standard for this group.

Meanwhile, with Christmas approaching, Kuo warned consumers to be prudent about spending. "Like a hangover after a party, every year, billings and defaults rise after the festive season," he said. "It is always better to be safe than sorry." (***)

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