Singapore’s credit card debt is at a record high. Learn why households rely on credit, the risks involved, and what it means for your finances.

Living on Credit: Why Singapore’s Credit Card Debt Has Hit a Record High — And What It Means for Households

Rollover credit card debt in Singapore has hit a new record, raising serious questions about how households are coping with rising costs and easier access to credit.

Are people overspending beyond their means? Are “buy now, pay later” (BNPL) services normalising debt? Or are more Singaporeans quietly living off their credit cards just to get by?

These questions were discussed on 93.8 CNA’s Talkback programme, where Leza Klenk, Chief Consulting Officer at EDUdebt, shared insights into what’s really driving this worrying trend — and why many cardholders only realise there’s a problem much later.

Unpaid Credit Card Balances in Singapore: A New Record

According to official figures reported by Channel NewsAsia, unpaid credit card balances in Singapore reached S$9.07 billion in the third quarter of 2025, the highest level recorded in over a decade.

This marks a sharp increase from earlier years and signals a worrying trend rather than a one-off spike. What is especially concerning is that this rise is happening even as the number of credit card holders has declined, suggesting that average credit card debt per person is rising.

In other words, fewer people are holding cards, but those who do are carrying larger balances for longer.

What Is Rollover Credit Card Debt?

Rollover credit card debt refers to unpaid credit card balances that are not settled in full by the due date and are carried forward into the next billing cycle.

Unlike short-term card usage for convenience, rollover debt usually indicates:

• Ongoing cash flow pressure
• Reliance on minimum payments
• Accumulating interest charged on balances

When balances roll over month after month, debt becomes structural rather than temporary — making it much harder to escape.

What the Monetary Authority of Singapore Data Tells Us

Data tracked by financial institutions and overseen by the Monetary Authority of Singapore shows that unpaid balances have been rising steadily across multiple quarters, including the second quarter and fourth quarter of recent years.

Key points emerging from the data:

• Card balances in Singapore have hit a new Singapore record
• The growth is driven by longer-held balances, not just higher spending
• Average debt levels per cardholder are increasing

This suggests deeper economic pressures rather than isolated consumer behaviour.

Why Credit Card Debt Is Rising in Singapore

Growing Financial Pressures Faced by Singaporeans

Many Singaporeans are facing growing financial pressures amid rising prices.

These include:

• Higher core inflation
• Increased costs of daily necessities
• Healthcare expenses and rising insurance premiums
• Pressure on healthcare savings and retirement planning

Even as some indicators, such as time core inflation ease, the cumulative impact of rising prices continues to strain household cash flow.

For many households, credit cards are no longer just a convenience — they are used to bridge monthly shortfalls.

Easier Access and Greater Payment Convenience

The way Singaporeans spend has changed.

With:

• Digital wallets
• BNPL services
• Greater payment convenience
• One-click card payments

It has become easier than ever to spend — and easier to delay the psychological impact of borrowing.

This shift in consumer culture makes debt feel less urgent, even as balances accumulate quietly in the background.

Why Credit Card Interest Rates Make Debt Hard to Escape

Credit card interest rates remain among the highest borrowing costs in personal finance.

Most cards charge around 25–28% interest per year. At this level:

• A S$10,000 balance can cost S$2,500–S$3,000 annually in interest alone
• Much of the credit card bill goes toward interest, not principal
• Debt reduction becomes painfully slow

This is why summary account interest rates matter far more than many cardholders realise.

Minimum Payments: Why “Paying Every Month” Still Fails

One of the biggest misconceptions is that paying the minimum amount means debt is under control.

In reality:

• Minimum payments are designed to keep accounts active
• They barely reduce balances
• Unpaid balances continue to grow

Many people feel they are “managing” debt — when in fact, they are simply servicing interest.

Buy Now, Pay Later vs Credit Cards: What’s Really Driving Debt?

BNPL services are often blamed for rising debt levels. However, BNPL did not create the problem — it normalised delayed payment behaviour.

BNPL:

• Reduces friction at checkout
• Encourages spending without immediate pain
• Makes repayment feel fragmented and manageable

When cash flow tightens, this behaviour spills into credit card usage, where interest rates are far higher and long-term damage occurs.

BNPL sets the habit.
Credit cards compound the cost.

Living on Credit: When Credit Cards Become a Lifestyle Tool

Originally, credit cards were meant for:

• Emergencies
• Short-term cash flow issues

Today, many are used to sustain:

• Dining out
• Travel
• Shopping
• Prestige-driven purchases
• A lifestyle income alone cannot support

This shift — from backup tool to lifestyle support — is dangerous because lifestyle debt has no natural end point.

The Silent Group: Still Paying, But Going Nowhere

One of the most overlooked groups includes cardholders who:

• Pay on time
• Avoid late fees
• Receive no legal letters

Yet their balances barely move.

They often believe:

“I’m paying every month, so I must be okay.”

In reality, rising interest rates mean their payments are largely absorbed by interest. This group is often at the earliest stage of long-term debt risk.

Credit Card Debt vs Other Financial Commitments

Many households are juggling:

• Credit card debt
• Home loans and HDB loan rates fixed
• Singapore home loan rates and mortgage rates
• CPF contributions to the ordinary account and retirement account

Even with falling home loan rates or fixed rate packages providing some relief, unsecured credit card debt remains expensive and unforgiving.

Why People Delay Taking Action

As discussed on 93.8 CNA’s Talkback, rising credit card debt is not simply about poor financial discipline.

Speaking on the programme, Leza Klenk, Chief Consulting Officer at EDUdebt, explained that many people delay action because:

• Debt feels “manageable”
• Consequences are delayed
• Statements don’t feel urgent
• Social pressure and appearances mask the issue

Unfortunately, time works against revolving debt.

Financial Literacy, Financial Counselling, and Early Intervention

Improving financial literacy is essential — but once debt has accumulated, education alone may not be enough.

This is where financial counselling plays a role:

• Reviewing balances objectively
• Understanding interest charged
• Identifying unhealthy credit habits
• Setting healthy limits before damage deepens

Early intervention preserves options. Late intervention limits them.

EDUdebt’s Perspective: A Timely Reminder for Households

From reviewing over 1,000 debt cases annually, EDUdebt sees the same pattern repeatedly:

People do not fall into debt suddenly.
They drift into it while coping with:

• Rising prices
• Household obligations
• Medical and family responsibilities

Credit cards don’t make people irresponsible — but ignoring how they work can trap even very capable individuals.

What This Record Means for Households

Singapore’s record credit card debt should be taken as a timely reminder to:

• Review your own credit habits
• Assess whether balances are truly reducing
• Understand how much interest you are paying
• Reflect on whether debt is affecting peace of mind

Setting healthy limits early helps protect long-term financial freedom.

Final Thoughts: A Record Worth Paying Attention To

Singapore’s credit card debt hitting a new record is not just another financial headline.

It reflects:

• Economic pressures
• Normalisation of debt
• Delayed action
• Growing reliance on credit to manage everyday life

Awareness comes first.
Clarity comes next.
Early action keeps options open.

Attribution

This topic was discussed on 93.8 CNA’s Talkback, featuring Leza Klenk, Chief Consulting Officer at EDUdebt, and based on data reported by Channel NewsAsia on Singapore’s record-high unpaid credit card balances.