Embracing the perks of a life free of credit cards

There's no fear of overspending, interest on unpaid balances and late payment fees

- Sue-Ann Tan

I was at a networking lunch with the corporate communications team of a financial institution some time back.

One of them asked if any of us still did not own a credit card.

I kept silent because I felt a sudden rush of shame. I don't own a credit card and had never intended to. I had also never felt that it was something I had to reconsider, until that day.

My philosophy has always been to spend only what I have at any given moment. And if it is a big purchase like a house or a car, technically I will be getting a mortgage or some form of secured loan, rather than using the unsecured loan that a credit card offers.

But it appears that I am the odd one out when it comes to living a credit card-free life.

According to data from OCBC Bank, more people in their 20s hold a credit card these days, with the number of them doubling in recent years.

"We recognise that credit cards are a rite of passage for many young people, as you can only apply for a credit card when you earn at least $30,000 a year. It signifies a change in life stage and the start of financial independence," said Ms Tok Geok Peng, OCBC's acting head for group lifestyle and ecosystems.

UOB also said that it continues to see steady growth in credit card ownership across all ages.

"Credit cards are growing in popularity, especially among those aged 35 and below, with a greater proportion of them holding credit cards as at end-2024," said Ms Jacquelyn Tan, the bank's head of group personal financial services.

She said the growth in number of younger people holding UOB credit cards year on year outpaces that of people above 35 years old.

In the 2023 financial year, nearly 25 per cent more people aged 35 and below held credit cards as compared with 2022. For those above 35 years old, the rise was only at 6 per cent.