Delinquency Rates for Credit Cards and Personal Loans On the Rise

Missed payments for personal loans increase five consecutive months from Sept 2008 – Jan 2009 as a result of deteriorating economic conditions and credit cards saw an increase in Sept – Dec 2008 but a slight decline in Jan 2009.

Singapore – More consumers in Singapore are struggling to pay their credit card bills and personal loan instalments on time, January 2009 statistics from Credit Bureau (Singapore) show.

CBS’ Analyses for Credit Cards
From September 2008 to January 2009, the percentage of consumers who missed at least one payment on one or more of their credit card accounts climbed steadily from 1.45% of consumers in September, 1.51% in October to 1.56% in November, and 1.67% in December and 1.52% in January 2009.

The latest delinquency statistics also represent an increase from the levels recorded in the year-ago period of September 2007 (1.35% of consumers), October 2007 (1.42%), November 2007 (1.46%),December 2007 (1.48%) and January 20008 (1.38%).

However, credit card delinquency remained well below the highs registered during the Q2 2003 SARS downturn, which saw a monthly average delinquency rate of 2.61% of consumers.

According to CBS’ analyses, consumers aged 30-34 exhibited a higher propensity to miss their credit card payments compared to the general population. In January 2009, 20.26% of consumers aged 30-34 had an account that was 30-or-more days overdue. Credit card holders aged 35-39 was next, with 20.47% of these card holders going delinquent in January 2009. Male consumers also showed greater inclination towards missing their credit card payments. As at January 2009, 67.99% of males – versus 32.01% of females – had an account that was 30-or-more days overdue.

CBS’ Analyses for Personal Loans
CBS’ latest Industry Statistics, which analyses Singapore’s unsecured credit payment behaviour in January 2009, also reveal that the delinquency rate for personal loans is trending upward. The proportion of consumers that had delinquent personal loan accounts that were 30-or-more days past due increased from 4.24% in September 2009 to 4.65% in October 2008, 4.98% in November 2008, 5.34% in December 2008 and 5.87% in January 2009.

These figures also represent a rise from the delinquency rates recorded in the year-ago period of September 2007 (4.02% of consumers), October 2007 (3.93%), November 2007 (4.06%) and December 2007 (3.73%).

However, missed payments for personal loans remained below the levels registered during the Q2 2003 SARS downturn, which saw a monthly average delinquency rate of 6.05% of consumers.

CBS’ analyses also reveal that consumers aged 30-34 showed the highest propensity to miss a personal loan payment. In January 2009, 23.93% of consumers aged 30-34 had a personal loan account that was 30-or-more days overdue. The next most vulnerable group was consumers aged 25-29, with 19.06% of this group going delinquent in January 2009. Male consumers were also more likely to miss their personal loan payments compared to female consumers. As at December 2008, 68.19% of males – versus 31.81% of females – had an account that was 30-or-more days overdue.

The worsening economy, the rising unemployment level, and the need to ramp up their year-end spending, have all taken a toll on consumers’ ability to manage their credit card and personal loan payments in January 2009. The latest statistics from CBS show some early indications that more consumers may be under stress from the impact of layoffs and the economic downturn, and are struggling to pay their bills on time. The steady increase in delinquency is a concerning trend as the bottoming of the economic fallout has not been seen. It is also worrying as younger adults are showing an increasing propensity towards delinquency.

The full results of the CBS’ January 2009 analyses are detailed in Appendix I. The data used in these macro-level analyses are derived from Credit Bureau Singapore’s members and are consolidated by Credit Bureau Singapore on an anonymous basis, thus ensuring that the consumer’s privacy is maintained.

Appendix I
Credit Card Delinquency

Breakdown by Age Group & Gender

Personal Loan Delinquency

Breakdown by Age Group & Gender