More people here are having difficulty paying off their debts, according to a report yesterday.
It found that 85,352 people had missed two or more months of payment on their credit facilities in June, up 10 per cent on the same period last year.
Unsecured debts are those with no collateral, taken via credit cards, overdrafts or personal loans.
The number of debtors has been steadily rising since 2011, with the June number 32 per cent above the level recorded four years ago, said the Credit Bureau Singapore (CBS) yesterday.
These laggards make up 5 per cent of the total population of Singapore consumers holding credit cards or personal credit lines.
RISK OF CREDIT CARD DEBT
It is just too easy to get pre-approved credit cards, and it's very common for one person to hold multiple cards.
MR PATRICK LIM, financial advisory director at PromiseLand Independent
Their overdue balances have risen in tandem, reaching $288.5 million in June - up 7 per cent from that last year and ahead by 74 per cent from that in 2011.
Debt exposure has also increased. The average balance per consumer for unsecured credit cards and overdrafts rose 16 per cent to $7,971 from 2011 to this year.
However, debt exposure appeared to stabilise in June, with the average balance per consumer for unsecured credit cards and overdrafts falling from $8,018 last year to $7,971.
The average principal sum for unsecured personal loans rose 5 per cent from June last year to $13,584.
"The situation of young people overspending using credit cards is not new," said Mr Christopher Tan, chief executive of fee-based financial advisory firm Providend.
He noted that the statistics were for the first half of the year, when consumer sentiment was still relatively upbeat.
"As Singaporeans get more affluent, they have few qualms over borrowing money to spend, and the interest-free instalment plans on higher-value purchases (using credit cards) give them the feeling that it's not borrowing," said Mr Tan.
Mr Patrick Lim, financial advisory director at PromiseLand Independent, said more should be done to educate consumers as many are still unaware of the extremely high interest charges on outstanding credit card debt.
"It is just too easy to get pre-approved credit cards, and it's very common for one person to hold multiple cards," he added.
Mr Lim said the new lending rules that kicked in on June 1 could have "come a bit too late".
These state that debtors with total unsecured debts above 24 months of their monthly income for more than 90 days cannot get more unsecured loans.
CBS executive director William Lim is more optimistic, noting that the average debt exposure for credit cards and overdrafts is stabilising. "This may indicate that the measures put in place by both the regulator and banks to help borrowers pay down their debt are beginning to have an effect on the market."