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You may remember the Hollywood movie Confessions of a Shopaholic starring Isla Fisher. In it, Fisher plays Rebecca Bloomwood, a finance journalist who rakes up a mountain of credit card debts as a result of her shopaholic ways. She gets hounded by phone calls from debt collectors, and she’s afraid to open her mail due to fear of seeing more credit card bills. We may laugh when we watch the movie, but when reel life becomes real life, it is no longer a laughing matter.

Credit Card Debt in Singapore is a real problem. Many people are affected and the total credit card debt in Singapore amounted to a sky-high figure. Tracy Ng (not her real name), shares her journey of spiralling down the debt tunnel and how she clawed her way out.

The $70,000 Credit Card Debt

Tracy is probably a real-life Rebecca Bloomwood. Four years ago, the 41-year-old knew she had a lot of outstanding credit card debts but never dared to face the situation. One day, she finally summed up enough courage to calculate how much she owed in total in credit card and credit line debts – it was a staggering amount of over S$70,000.

Tracy’s huge, crushing debt was the result of rolling interests and constant borrowing from lower interest credit lines to pay for the other cards. This created a downward spiral as the debts accumulated and snowballed into an amount incomprehensible to many of us.

“I felt emotionally and physically burdened from my debts. My monthly salary of $6,000 as a marketing manager was not enough for me to pay off the debts,” said Tracy. “I was basically only paying off the bare minimum every month. At one point, I felt really low and wondered if I would ever get out of debt.”

"She saw well-heeled ladies and men who did not look like they had financial woes, and some who looked like they 'have gambled their entire house away'.”

Accepting Credit Counselling

Eventually, Tracy plucked up a huge load of courage to acknowledge and address the elephant in the room. She enrolled herself in the Credit Counselling Singapore (CCS) programme 1.5 years ago and it has helped her to restructure her payments with the banks to a maximum of four years.

“It was the courage to face the scary amount of debt that forced myself to go to CCS,” said Tracy. She recounted that at the CCS seminar, there were countless of people from all walks of life. She saw well-heeled ladies and men who did not look like they had financial woes, and some who looked like they “have gambled their entire house away.” Amongst the diversity, she found some solace in the fact that there were people her age in the group, which made her feel relieved that she wasn’t facing all of this alone.

The programme has helped to reduce the interest rates she faced to 3% for every account, taking a load off her shoulders. She is currently still paying approximately S$1,500 per month to various accounts. In fact, she’s already cleared the debts for one card, slowly but steadily inching towards debt-free days.

“It wasn’t to the extent that I had problems going out or having regular meals. I just couldn’t save anything and the debts didn’t look like they were being reduced since I was only touching on the interest payments each month. Every payday was a relief, yet they also brought about a feeling of resignation. I longed for the day where I could be debt-free.”

"My dad gave me my first credit card when I turned 18. You could say that was the start of the tsunami today.”

Tracy had been blessed with the fact that she stays with her middle-class parents and has her physical needs like daily living necessities taken care of, but the emotional stress weighed down heavily on her.

“Growing up, I was quite the spoilt brat. My parents basically indulged me in whatever pursuits I wanted. It didn’t help that I became stubborn and dramatic if I was not given what I wanted. My dad gave me my first credit card when I turned 18. You could say that was the start of the tsunami today.”

The Cold Turkey - Cutting Out All Credit Cards

As a consequence of being in the CCS programme, credit facilities were cut from the banks for Tracy and since then, she can only get by with the use of debit cards.

“This incident was literally a cold turkey exercise that I had to stop using any credit facilities and could only rely on what I have. My family was the greatest source of support for me before I went to CCS. My mum would sometimes loan me some fast cash to tide me over the month and I constantly felt low because of that,” recounted Tracy.

“I was always feeling trapped on how to get out of that vicious cycle and would get depressed knowing someone at my age should already have a better sense of money. I only told my close friends about the problem. While I did not borrow money from them, they did also encourage me to get help, and so eventually I did.”

Today, Tracy runs her own creative agency. “My income situation is better now, and everything is slowly becoming more balanced. There are still times when I feel mentally and physically exhausted from work, but the thought of being able to save and clear my debts spurs me on.”

"If you have to penny-pinch three months to buy a branded item, you are most likely NOT in the financial state to afford one."

Inching Closer to Debt-Free Days…

“The biggest comfort is knowing that, hopefully, before the end of four years, I will be debt-free. I also never want a credit card or credit line anymore. I realise now, credit cards are not a necessity. The tendency to think future payments can be paid off by future monies is just a fallacy. Nothing is more liberating than being debt-free and that you have the freedom to choose if you want to work for leisure or suffer a full year for that bag or watch.”

To others who are facing similar financial woes, Tracy has this to say: “Don’t spend what you don’t have in your bank. Don’t use lower interest rates to tide over the higher tiered ones, because it will then breed an alternative ‘easy way-out’ option which will definitely snowball into larger debts.”

“At the end of the day, it is basically how responsible you want to be for yourself and your loved ones. Only when that sense of responsibility becomes innate in you will you practise what you believe in and not what is just commonplace doctrine. I suppose the usual will be to always save at least 30% of your income and never invest/gamble what you can’t lose. If you have to penny-pinch three months to buy a branded item, you are most likely NOT in the financial state to afford one.”

When asked what her biggest takeaway is from this incident, Tracy said: “Spend what you have and don’t look into tomorrow’s vault, because there won’t be one if you waste what you don’t.”



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