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SINGAPORE: More Singaporeans are paying for their big-ticket items via credit card instalments during these tough times.
From July-November, some retailers reported a 10 per cent increase in the number of consumers who opted for monthly instalment payment.
Gain City's marketing manager, Evonne Lee, said: "It kind of stretches the dollar in that sense and it gives the customer a lot more discretionary income. For example, if you buy, say, LCD which is worth $3,000 and you opt for a 24-month instalment plan - that works out to be about $125 a month; it makes the purchase very affordable."
Increasingly, younger customers are buying products and opting to pay via instalments. And they're paying these instalments over a 12-month period.
Gain City expects that figure to grow, come next year. The company also expects another 20 per cent of customers to opt for instalment payments with repayment plans extended to 36 months.
But paying by monthly credit card instalments has landed a 42-year-old sales administrator in trouble. The man (who refused to be named) chalked up S$110,000 debt from buying home appliances.
He said: "That time, the instalment was just, maybe, about $500 only. I thought I could still afford more instalments. So I took up another instalment. Then, I thought (I) still could afford. I took some computer products, until it (instalment) accumulated to about $1,200 per month....that kept on accumulating until I reached a certain stage I found that it was too burdensome for me to service all the instalments."
Like him, many are turning to Credit Counselling Singapore for help.
Credit Counselling Singapore's president, Kuo How Nam, said: "The risk to these people will be that moving forward and if the recession is very deep, and you see the number of retrenched people going up, these people will find difficulty in meeting their instalment plans. If you can, postpone the purchase. Better to be safe, rather than sorry later on."
In the last five months, there has been a 50 per cent jump in the number of Singaporeans turning to the centre for help on debt management.
- CNA/ir
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