8 credit cards per eligible earner, but billing and rollovers firmly in check
By SIOW LI SEN
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(SINGAPORE) There are more than 6.5 million credit cards swirling around, making it 7.8 cards for every eligible income earner in Singapore, as credit card issuers wage a desperate battle against the tide of declining plastic consumption.
But Monetary Authority of Singapore (MAS) credit card statistics show that not only are Singaporeans continuing to spend less on their cards, they also pay up in full faster than one can say 'credit'.
Credit-card billing in July was down 3.5 per cent from June, while the rollover balance fell 2.8 per cent despite the number of credit cards climbing to an all-time high of 6.53 million.
'Singaporeans are very disciplined when it comes to spending,' said Gan Ai Im, regional and Singapore head for cards and payment products at United Overseas Bank (UOB).
In fact, some say Singaporeans are more disciplined than our neighbours.
'Based on industry reports we've seen, Singaporeans revolve less on credit cards as compared to our Asian neighbours,' said Lynn Gaspar, OCBC Bank head of lifestyle credit.
Ms Gaspar added that the revolving behaviour can be influenced by regulatory requirements around the issuance of credit cards from country to country.
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Even the improving economy has not gone to the heads of Singaporeans when it comes to splurging with plastic.
This week, 21 economists polled by MAS say they expect a speedy recovery. They have trimmed their median forecast for a 3.6 per cent contraction for this year, against a 6.5 per cent decline in June. The unemployment rate has also been lowered to 3.8 per cent by year-end, compared to 4.2 per cent in the June survey.
The card explosion has made it harder for bankers to entice their credit card members to bill more.
With 840,000 taxpayers who have an income of at least $30,000 a year (based on the latest taxman's annual report), that comes up to almost eight cards per person. One must show a minimum $30,000 annual income to be eligible for a credit card and banks have to come up with new ideas to make plastic lucrative.
DBS last month launched a contactless credit card which offers ez-link payments for the train and bus. Aimed at the younger Internet generation, DBS also set up a Facebook group - believed to be a first in Singapore - for its cardholders who can post photos of themselves at parties and gigs.
Standard Chartered says its Visa Infinite card rewards programme is based on a customer's total banking relationship. This means customers can earn points on the card by including their interest-bearing current and savings accounts, fixed deposits, investments and mortgages as well card spend.
Dennis Khoo, StanChart Singapore general manager, retail banking products, said while market growth is flat, the bank has bucked the trend with strong double-digit growth since the start of the year.
'We believe that in the coming months we would continue to see double-digit spending growth,' said Mr Khoo.
UOB's Ms Gan said card spending is looking up and expects August to see a reversal of the lower billing.
The bank, which has about a million cards in the market, has tied up with over 1,000 dining and entertainment outlets as well as a similar number of retail outlets offering special deals to card members.
To encourage more spending on its cards, OCBC is now giving small change to those who use their plastic.
According to Ms Gaspar, the OCBC SmartChange is one way in which customers get actual cash savings instead of rebates or savings while making their purchases.
Its SmartChange allows every purchase charged to an OCBC credit or debit card to be rounded up to the next dollar, with the difference being channelled to a designated OCBC savings account.
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