Rules could be eased for older Singaporeans to qualify for credit card

SINGAPORE: Those aged above 55 could soon be able to apply for credit cards even if they do not meet the minimum income requirement of S$15,000 a year, if a proposal by the Monetary Authority of Singapore (MAS) goes through.

The proposal is among a slew of changes the regulator is looking to implement regarding the issue of credit cards and unsecured loans to individuals.

The MAS wants to give financially secure individuals above the age of 55 greater flexibility to qualify for a credit card.

Currently they must have an annual income of at least S$15,000 to qualify.

But under the proposed changes, they will also qualify if they have net personal assets exceeding S$750,000 or a guarantor with an annual income of at least S$30,000.

Many older Singaporeans welcomed the possibility of the rules being relaxed.

Christopher Phua, aged 55, said: "Nowadays, to go out with cash in the pocket, it’s quite troublesome. So, credit card is a more flexible way of moving around cashless, so I think it’s a good idea."

Eileen Lin, a 61—year—old property agent, said: "At least we have a card to use. (To buy some things), you really need credit cards, like some online purchases."

But others were cautious, saying that this could lead to overspending.

Marina Say, a 65—year—old retiree, said: "It’s not a good idea, especially for those who spend a lot of money and never consider what happens (next)...I don’t think credit card is important to me, because for old people like us, (when we go overseas with friends), we normally bring along cash. We don’t use credit card."

Roland Wong, a 73—year—old retiree, said: "I don’t think it’s necessary for a credit card, because NETS is so convenient, so I use NETS."

Industry players said most retirees are prudent with their spending, so they may not be the ones the banks need to worry about.

Kuo How Nam, president of Credit Counselling Singapore, said: "Retirees are a good credit risk. Most of the people who are in trouble — their average age is about 40. Hardly see any retirees, unless they get into trouble with gambling or it’s carried forward from the past."

Some Singaporeans said their elderly parents should not have to miss out just because they retire.

Wilvin Koh, 27, who works in corporate planning, said: "Since my parents have supported me all these years when I never had an income, I don’t see why during their retirement years, if they want to splurge, and they need a guarantor for credit cards, why not?"

Details of the MAS proposals have been released in a consultation paper available on the MAS website. The public can give their feedback to the proposals by 21 January 2013.

— CNA/ir