Restrict the issue of credit cards

Hello Mr Tan,
Someone said that credit card facilities to consumers need to be tightened up, to prevent situations where a person gets multiple credit lines from many banks. Do you have any ideas on how this can be done?

Journalist

MY REPLY

It is important to educate consumers to avoid borrowing on credit cards. The interest charge on late payments could be as high as 2% per month. This works out to 24% a high. It is extremely high.

Many consumers borrow excessively on credit cards and incur large debts with high interest costs. They are not able to cope with the debts, and have to declare bankrupcy.The number of these cases have been increasing in alarming proportions - according to insiders who are involved in collection of credit card debts.

I suggest that MAS should require all banks to provide data into a central database managed by MAS on the credit cards taken by individual persons. Each person should be limited to a maximum of two credit cards. The total credit limit on these cards should be limited to two months of salary.

Banks should not be allowed to issue credit cards, if an individual already has two cards. Exceptions can be made for high net worth individuals who need more than two credit cards.