Not one big spending spree: Why more people in their 30s, 40s in Singapore seek help over credit card debt

People in their 30s and 40s made up the two largest age groups seeking help for credit card and other unsecured debts between 2021 and 2025, according to data from Credit Counselling Singapore (CCS) for The Straits Times.

Their debt issues stem mainly from discretionary spending on lifestyle, as well as income shocks, such as a sudden drop in household income due to retrenchment or pay cuts, said the non-profit social service agency.

This mirrors the wider trend observed by CCS across all age groups, including those in their 20s and those aged 50 and above, as they also most commonly fall into debt due to lifestyle spending and a drop in household income.

Highlighting the difference in priorities across the age groups, help-seekers in their 30s indicated they also incurred large debts for home renovations, the third-biggest contributor to their debt woes.

In contrast, other cohorts – including those in their 40s – faced greater strain from the financial commitments of supporting their families, such as children or elderly parents.

The experiences of Li and A (not their real names), both in their 30s, serve as a cautionary tale of how an over-reliance on credit can quickly balloon into a large debt pile if left unchecked.  

Living on credit

Li had accumulated $57,000 in credit card debts and personal loans by the time he sought help from CCS in April.

“It wasn’t one big spending spree,” he said, elaborating that the money went towards home renovations, daily living costs and discretionary expenses. 

“I was earning, I had commitments, but I made the mistake of using credit whenever I didn’t have enough cash,” he admitted.

It was this repeated decision to use credit and deal with repayment later that drew him into an unsustainable debt cycle. The balances kept accumulating, and eventually, the repayments became too much for his income, Li said.

Similarly, A’s debts snowballed to $46,000 until he could no longer afford the monthly repayments. 

A said his difficulties arose when his company delayed his salary by 1½ months. 

“I have expenses to prioritise, such as insurance premiums, milk powder for my child and other daily necessities,” he said.

Without his salary, he could not pay his credit card bills and other loan commitments. 

“The interest started accumulating and the outstanding was a bit too much for me to pay,” he said, adding that he reached out for help in June.

Rising balances, steady guard rails

Li and A are part of a growing trend of borrowers seeking help for their credit card debts.

CCS shared that the number of people it has counselled rose to a three-year high in the second quarter of 2026. There were 814 such cases, an increase of 21% from the same period a year ago.

The rising number of indebted borrowers is driving a steady increase in national rollover balances. 

Data from the Monetary Authority of Singapore (MAS) showed that rollover balances continued climbing to $9.64 billion in the second quarter of 2026, an increase of 2.5% from $9.4 billion at the end of 2025.

Rollover balances, which refers to the portion of a credit card bill that is not paid in full by the payment due date and rolls over to the next billing cycle, had crossed $8 billion at the end of 2024.

Willie Tanoto, senior director for the Asia-Pacific financial institutions at Fitch Ratings, said this growing pile of debt incurs very high interest rates.

If left unpaid for a prolonged period, the balances can accumulate into larger sums and weigh on a borrower’s capacity to make repayments, he noted.

In Singapore, credit card balances are one of the most expensive forms of consumer debt, with interest rates on unpaid balances among the highest at around 27.8% to 27.9% per annum, calculated daily.  

Tanoto pointed out that the rise in rollover balances also has to be seen in the context that more people are spending and moving away from using physical cash.

While unpaid credit card debt grew by 13.4% a year over the past five years, total credit card spending grew at a relatively similar rate of 12.5%.

This indicates that the percentage of users who fail to pay their bills on time has barely changed, Tanoto said.

In its Financial Stability Review that was published on Sept 22, MAS showed that rollover balances as a share of personal disposable income increased marginally to 2.5% in the second quarter of 2026, from 2.4% in the second quarter of 2025 and higher than the 10-year average of 2.3%.

To put this into perspective, the figure for 2026 means that for every $100 of take-home pay, the average household rolled over $2.50 in unpaid credit card debt.

A similar uptick was observed in unsecured personal loans. The ratio of personal loans to personal disposable income edged up slightly to 0.31 in the second quarter of 2026, from 0.28 a year earlier. The ratio remains below the average of 0.35 over the past decade. 

MAS also noted in its report that the credit card delinquency rate was 0.9% in the second quarter of 2026, below the 10-year average of 1.1%.

Measured by the number of borrowers, it means that fewer than one out of every 100 cardholders has missed their payment due date. 

Ivan Tan, a director of financial institutions ratings at S&P Global Ratings, noted that the risks appear manageable for now because the credit card charge-off rates have largely remained flat at 5.9% in the first half of 2026. 

The charge-off rate refers to the bad credit card debts that the banks write off as uncollectible, divided by the average rollover balance.  

Tan added that Singapore has strong regulatory guard rails, including credit limits calibrated to a borrower’s monthly income.

For credit cards and unsecured personal loans, the system enforces individual bank caps and a broader, industry-wide credit limit.

A bank can grant a credit limit of up to four times an individual’s monthly income for those earning between $30,000 and $120,000 a year. 

There is also a limit across all banks, which is capped strictly at 12 times an individual’s monthly income.

For example, an individual earning $30,000 a year has a monthly income of $2,500. Their maximum credit limit would be $10,000 with a single bank and capped at $30,000 with all banks. 

If outstanding balances breach this 12 times monthly income ceiling for three straight months, banks are legally required to freeze all further credit transactions. 

Pockets of vulnerability

While there are “no clear indications of broad credit stress among resident households”, Fitch Ratings’ Tanoto noted that there could be pockets of vulnerability as economic pressures and the cost of living mount.

In that same Financial Stability Review, MAS’ stress test revealed that around 1% of borrowers could face negative cash flows when there is a sharp global AI-related downturn.

Under that scenario, household income drops by around 10% and unemployment rises. 

The vulnerable borrowers have saving buffers of less than six months of the resulting income shortfall.  

They are mostly middle-aged HDB residents with relatively lower incomes. Some of them are also middle-income borrowers with sizeable outstanding private housing loans, MAS noted in the report.

For borrowers feeling the financial strain now, Li has this advice: “Deal with the debt problem early.”

He added: “Don’t wait until the repayments become impossible. Sit down, calculate everything you owe, stop taking on new debt and seek help if you need it.

“There is no shame in asking for help. For me, admitting that I couldn’t solve it on my own was actually the first step towards getting my finances under control.”

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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