Rollover balances at record high as Singaporeans' credit card debt rises

High interest rates compound problem, with debt cycle a looming possibility

- Chor Khieng Yuit

Singaporeans are spending more on their credit cards and getting further into debt as they defer bill repayments and are faced with high interest rates.

These sky-high rates on credit card debt are a "hidden, silent killer", said Mr Alfred Chia, the chief executive of advisory firm SingCapital.

The Monetary Authority of Singapore noted that credit card rollover balances - the amount not paid by the due date - hit a record high of $7.9 billion in the third quarter of 2024.

They crossed the $7 billion mark in the fourth quarter of 2023, marking the first time this level had been hit since data was available in 2014, and have continued rising.

Total credit card billings are also up, increasing 1.3 per cent from the second quarter of 2024 to $24 billion in the third quarter.

While that is shy of the high of $24.3 billion in the fourth quarter of 2023, total billings have been hovering above $20 billion since the third quarter of 2022.

A DBS spokesperson said the rise in credit card rollover balances reflects a return to normal as people spend more on travel and dining following the Covid-19 pandemic.

The spokesperson added that credit card rollover balances now account for a smaller share of total card billings compared with before the pandemic.

A UOB spokesperson said there is "no significant change in delinquency rates across the different demographic groups".

Dining comprised a relatively higher proportion - about 10 per cent - of total card spend, followed by essentials like insurance, medical and groceries, the spokesperson added.

An OCBC spokesman said the bank's "credit card delinquency rate remains stable, as unemployment rate remains low and household balance sheets remain resilient".

A Credit Bureau Singapore report offered further insights into the behaviour of different age groups.