Spending too much on festive giving during the holiday season?

Enjoy thinking about the perfect gift to pamper someone you love? Shopping for your loved ones can be fun if you know you can afford to splurge occasionally. But spending beyond your means can be a problem.

Putting too much on that credit card or relying on other forms of unsecured loans can be quite disastrous. Here’s why.

  • With a steep interest charge of around 25% p.a. for credit cards, the debt will very quickly snowball. You may soon find yourself struggling to pay off your mounting debt. 
  • Non-payment or late payment of your credit card bills or other loans could lead to adverse records with the consumer credit bureaus, Credit Bureau (Singapore) Pte Ltd (CBS) and DP Credit Bureau Pte Ltd (DPCB). A poor credit record may hurt your ability to borrow in the future. 
  • You can also be made bankrupt if you have unpaid debts of S$15,000 or more.

Don’t pay the price for being too easy about spending on credit. Remember that your debt problems affect not only you, but your loved ones too.

So, watch out for the telltale signs that you may be overspending

  • You spend up to your credit limit
  • You often take up instalment plans to pay for things you otherwise cannot afford
  • You only pay the minimum sum on your credit card bills every month
  • Most of your income is spent paying your credit card bills or instalment payments
  • You borrow money to pay your credit card bills
  • You take cash advances from one credit line to pay another credit line


If you are already in debt, take charge and act now to improve your debt situation

Tip 1: Limit your spending

Take action to manage your debt and credit card spending.

Tip 2: Pay your credit card bills in full and on time

  • Monitor your total outstanding credit card balances. Do not roll over your credit card bills. Paying late and rolling over your credit card bills will attract late fees and interest charges.
  • If you do not make full payment, interest is immediately charged on any new purchases in addition to the existing outstanding balance. This means when you miss just one full payment, every subsequent spend on the credit card will immediately attract up to around 25% interest.
  • Use your credit cards for the convenience of going cashless but not as an extension of credit. 
  • Limit the number of credit cards you hold and ask for lower credit limits to control your spending.  
  • Alternatively, use a debit card so that you can will only spend what you have in your account.

Tip 3: Review your financial situation regularly

  • If your income falls, or there is an increase in financial commitments – this means you will have less cash to spend. Review your budget to plan ahead and trim spending.
  • Reduce credit card spending and reliance on loans, as it may be more likely you are unable to pay bills in full and on time, and incur more debt via interest charges.
  • Trim your spending and avoid taking on more debt than you can afford.
  • Use debt calculators such as the MoneySENSE debt calculator at http://www.moneysense.gov.sg/Financial-Planning/Financial-Calculators/Debt-Calculator.aspx to estimate how long it will take to clear your debt. 

Tip 4: Beware of instalment plans

  • When offered retail instalment plans, do work out the true total cost over time, and check your budget to ensure you can service the monthly commitments till the end of the instalment period.
  • If you are considering a zero-interest instalment payment plan, do find out if there are interest and penalty fees if you do not pay each instalment in full and on time. 

Who can I approach for help? 

If you have difficulties paying your credit card bills in full and on time, get help straightaway. Be responsive to your lenders’ calls and letters and approach them for a debt relief instalment payment plan. You can also approach Credit Counselling Singapore (6225 5227 / www.ccs.org.sg) for assistance to help resolve your debt problems.

How do I check my credit score?

It is important to know your credit standing! It can affect your ability to obtain loans or credit lines.

Credit reports are available from Credit Bureau Singapore (CBS) and DP Credit Bureau (DPCB). If you have recently applied for a credit facility from the banks, you will be entitled to a free credit report from CBS or DPCB. You can purchase the reports to check if you have any adverse records and clarify with the credit bureaus if there are discrepancies. 

Visit their websites for more information on how to obtain and read a credit report. 

Sample credit reports from the respective bureaus can be found in the following webpages (below).

CBS: http://www.creditbureau.com.sg/understanding-my-credit-report
DPCB: http://www.dpcreditbureau.sg/SampleReport.aspx