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The Straits Times
Dec 4, 2011
YOUR LETTERS
Banks going overboard with credit line offers


It used to be that if one could not afford something, one would either save up for it or live without it.

Borrowing to finance a lifestyle beyond one's means violated virtues like frugality and prudence. It also lulls one into believing that resources can indeed be unlimited even as wants keep growing. The resulting consequences can be disastrous, such as debts that threaten to spiral out of control and loss of credibility from the failure to service such borrowings.

The banks are changing all that, with all-out campaigns to get people to sign up for credit lines which promise quick and easy cash, as well as free gifts and monthly interest discounts.

Sometimes, people who do not meet the income requirements of such credit lines are also invited to undertake balance transfers - a euphemism for unsecured loaning from banks.

There is something very disturbing about emphasising the amount of money one would save and the instant gratification one would derive from borrowing money.

In one bank's promotional blitz, a 40per cent rebate on monthly interest is offered. It also adds that, compared to 'interest rates of 24per cent per annum on other banks' credit cards', its customers, who pay 5.41per cent interest per annum for their loans, enjoy savings of 78per cent.

At another bank, the seduction lies in 'seizing opportunities', 'living life to the fullest' and 'getting the holiday you deserve' - all with money that you do not have.

Paying 5per cent interest to satisfy one's cravings for material pleasure and goods makes bad financial sense, especially with banks paying close to nothing for deposits.

I am not against banks doing business, for the supply of liquidity has always been critical to economic activity and growth. Moreover, there are good loans, including those which help people to accumulate assets and tide over difficult periods in life.

What I am against are the indiscriminate soliciting of application for credit lines by banks' agents, and banks equating liabilities (borrowings) with freedom, pleasure and assertion of the self.

While legal moneylenders are banned from publicising their services, banks are allowed to openly entice people into borrowing money to finance a somewhat impossible lifestyle.

Lena Soh (Ms)
borrowed $ to for material pleasure and goods?

WAKE UP from these traps!!! don't do that!! :O
On the topic of borrowing... Standard Chartered ignored my credit card application for the free $130 Sad Grrr...
(04-12-2011, 01:54 PM)brattzz Wrote: [ -> ]borrowed $ to for material pleasure and goods?

WAKE UP from these traps!!! don't do that!! :O

Ya! Even the filthy rich have to live within their means. Every thing is relative.
In the first place, go and ask them how they get rich. Equity plus always and plenty of IGAs, that's how. Err.... how to be like them?
(06-12-2011, 02:57 AM)piggo Wrote: [ -> ]On the topic of borrowing... Standard Chartered ignored my credit card application for the free $130 Sad Grrr...

do u mean the 80sgd per card, max up to 2 card deal? (provided by another forumer in another thread)
Credit card and credit line pushers are pretty aggressive. I always see them staking out at a roadshow located in a mall and when I pass by they will try to sell me a credit card. I always have to say a firm "No".

Quite happy with owning just one credit card which gives me an interest-free loan of about 2 months, and I always pay my bills on time! Tongue
yes $80 per card, +$50 if it's not delivered within 1 business day deal...
I hate flies! Now I just hold up my palm without eye contact, and walk pass quickly. Worst than the PRC who ask you 帅哥,要按摩吗?

When I am in very good mood, I ask them "Can apply? I got no job." or "Can I lend you money at the same interest rate?"