deal with it straight away

Subscriber exclusiveNot one big spree: Why more people in their 30s, 40s are seeking help for credit card debt in S’poreChor Khieng YuitFollow topic:Credit/Debit cardsSummaryPeople in their 30s and 40s made up the biggest groups seeking help for unsecured debt, driven mainly by lifestyle spending and income shocks.Credit Counselling Singapore said cases rose to a three-year high of 814 in Q2 2026, while MAS data showed rollover balances climbed to $9.64 billion.Risks are still seen as manageable because delinquency and charge-off rates are low, but stress pockets remain.AI generatedPublished 4 hours agoUpdated 2 hours agoListenIvan Tan, a director of financial institutions ratings at S&P Global Ratings, noted that the risks appear manageable for now because the credit card charge-off rates have largely remained flat at 5.9% in the first half of 2026. The charge-off rate refers to the bad credit card debts that the banks write off as uncollectible, divided by the average rollover balance.  Tan added that Singapore has strong regulatory guard-rails, including credit limits calibrated to a borrower’s monthly income.For credit cards and unsecured personal loans, the system enforces individual bank caps and a broader, industry-wide credit limit.A bank can grant a credit limit of up to four times an individual’s monthly income for those earning between $30,000 and $120,000 a year. There is also a limit across all banks, which is capped strictly at 12 times an individual’s monthly income.For example, an individual earning $30,000 a year has a monthly income of $2,500. Their maximum credit limit would be $10,000 with a single bank and capped at $30,000 with all banks. If outstanding balances breach this 12 times monthly income ceiling for three straight months, banks are legally required to freeze all further credit transactions. More on this topicS’pore firms, households have sufficient buffers to weather financial shocks: MAS reviewTrack expenses down to the cent – or keep it simple? Find something that works for youPockets of vulnerabilityWhile there are “no clear indications of broad credit stress among resident households”, Fitch Ratings’ Tanoto noted that there could be “pockets of vulnerability” as economic pressures and cost of living mount.In that same Financial Stability Review, MAS’ stress test revealed that around 1% of borrowers could face negative cash flows when there is a sharp global AI-related downturn. Under that scenario, household income drops by around 10% and unemployment rises. The vulnerable borrowers have saving buffers of less than six months of the resulting income shortfall.  They are mostly middle-aged HDB residents with relatively lower incomes. Some of them are also middle-income borrowers with sizeable outstanding private housing loans, MAS noted in the report.For borrowers feeling the financial strain now, Li has this advice: “Deal with the debt problem early.”He added: “Don’t wait until the repayments become impossible. Sit down, calculate everything you owe, stop taking on new debt and seek help if you need it.“There is no shame in asking for help. For me, admitting that I couldn’t solve it on my own was actually the first step towards getting my finances under control.”Chor Khieng Yuit is senior correspondent at The Straits Times. She believes in financial education for the masses, particularly the low-income, the elderly and people with special needs.See more onCredit/Debit cardsLoansFinancial literacyFinancial counselling