Live & Learn
The Road Out of Debt

Contributed by Credit Bureau (Singapore)

Rachel Wong* has given up on cash.

Whenever and wherever possible, even at the vending machines in her office building at Raffles Place, the 32 year old business development consultant uses her credit card. The ease of buying with plastic has conditioned her to want to spend more. She earns $4000 a month and most would consider that she had a good job in the heart of the central business district. However, she was only able to pay the minimum sum of $500 for her 6 credit cards every month. 

She says, “I was earning a decent sum then, so I thought I could treat myself and pay back the following month.” Rachel adds on, “Paying $5 for a coffee might seem like a lot if you only have $10 in your wallet. But if your credit card has a $10,000 limit on it, it does not seem like much.”

But soon, she lost track of how much she was spending. She would continue to buy her fancy coffee every morning, splurge on trendy clothes and the latest gadgets. 

Her debts soon snowballed and before Rachel knew it, she owed $80,000 to the banks. 

Her story is typical of many who have been caught up in a credit card situation which has spiralled out of control. Like Rachel, we do not realise the implications of not paying our credit card bills in full and on time or having a bad credit score, until we apply for a loan such as a car or a property. Only by paying these bills on time, will we be able to experience the full advantage of such cards.

Rachel has since sought help from Credit Counselling Singapore with her debt problem.

Also, do not forget about your credit report. Check at least twice a year to ensure that the information reflected is updated. With the information in your credit report, lenders will be able to decipher if you have made full payments on your monthly bills. They will also be aware of your total outstanding debt. If full payments are not repaid, your balance may be subject to monthly compounding interest. In fact, these days, even a simple credit card application requires lenders to pull out your credit file. As such, it’s important to maintain a healthy score by keeping good repayment habits. 


Free Credit Report Redemption

In support of the industry-led initiative to empowering consumers to know what the banks and financial institutions know of them, CBS is giving out free credit report to encourage more to take charge of own credit data. 

Consumers who have applied for a new credit facility with any of Credit Bureau Singapore’s (CBS) member banks or financial institutions can receive a free copy of their credit report, with effect from 1 April 2016.

Your credit report is an indication of your financial health and is used by all lenders in Singapore to assess the risk involved in granting credit. It is thus important to monitor your credit review and review the same credit data as the lenders. 

Credit reports are available at

*Not her real name