No minimum pay needed for new credit card


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zcf

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Apr 10, 2005
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What do you all think? A good news to those without credit card? Or a bad news that more will be in debt?

But limitation of $500 hopefully won't put much people into great debt.

http://www.straitstimes.com/Money/Story/STIStory_140545.html

No minimum pay needed for new credit card
Citibank's new offering aimed at young adults; credit limit set at $500By Bryan Lee

A RADICALLY new type of credit card with no minimum income requirement and just $500 in credit has arrived in Singapore.

Global banking giant Citibank yesterday launched Singapore's first-ever credit card that does away with the standard $30,000 minimum annual income requirement.
The American bank is taking advantage of a recent regulatory change and will start taking applications for its new Citi Clear Card from today. The card, mainly aimed at students and other young adults, will have higher 28 per cent interest on rollover balances.
Citibank says the new plastic is unlikely to be instantly profitable. But it says the card will give it a head start in building relationships with young adults aged 18 to 35, so that it can later sell them other financial services when their careers are under way.
Parental consent is needed for applicants under 21 but the bank will not require their parents' income information. Citibank will also accept applications from older Singaporeans. Still, industry insiders said university students will be the prime targets as they are more likely to embark on well-paying careers on graduation, becoming potentially lucrative clients.

#related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} Going on Clear Card
Credit limit: $500

Minimum age: 18 (parental consent required if below 21)



Indeed, tertiary students were highlighted as a target group by the three local banks which are looking to launch similar credit cards soon.

Citibank's latest salvo in the local credit card market comes hot on the heels of a change in March by the Monetary Authority of Singapore to rules for unsecured loans. In line with a worldwide shift towards allowing banks to manage their own risks, banks in Singapore are now exempt from a long-standing salary criterion that has put credit cards out of the reach of 900,000 Singaporeans aged 18 to 54. The only catch is that the maximum credit they can extend to these customers is $500, a fraction of the typical limit of two months' pay.
This is not uncommon elsewhere. Students in the United States have long had access to credit cards with US$2,000 (S$3,030) limits.
'The opening of this segment has given us the opportunity to extend our reach to a new group of consumers,' said Citibank Singapore marketing director Ong Lay Choo.
The bank is focusing on the 500,000 young adults aged 18 to 35, who earn less than $30,000 a year. It is using its Clear Card brand, a standard card aimed at young professionals.
But it is not without cost. Virgin cardholders, some with no job or credit history, face a higher risk of default. So they will be monitored closely.
For instance, cards will be blocked instantly if the minimum monthly payment is not made on time. This differs from the standard practice where late-paying customers are slapped with a penalty but are able to keep using their cards without disruption.
The low credit limit also caps the amount of fees and interest that can be reaped from these customers.
Junior college student Sng Ren Zheng, son of a businessman, is keen to apply for a card after he turns 18 next month. 'I don't always have much cash on hand. A credit card will come in handy when I want to buy that $399 Hugo Boss shirt. If I wait for my $150 weekly allowance, the shirt might be gone.'
But university student Gabriel Tan, 23, said he is happy with the Visa debit card that he already holds, as it functions almost like a credit card.
DBS Bank consumer banking head Edmund Koh said the local bank stands to benefit most when it launches its own $500-limit credit card.
'Through POSB, we are already serving a base of mass-market customers. We know their savings behaviour which will reduce our credit risk. This allows us to offer this product at a lower cost,' he said.
OCBC credit cards head Wong Ting Mei said the bank will be launching a similar card aimed at tertiary students. University students offer an added bonus. Said an industry expert: 'Surely their parents will make sure they don't start off with a bad credit history, wouldn't they?' bryanlee@sph.com.sg
 

sigg

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May 4, 2005
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one bank starts...the others will follow suit.......

more bankruptcy!!
 

hongsien

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#5
There is another CC with no minimum income requirement, but you need to have a SGD 20,000 deposit in the bank......

HS
 

waileong

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#6
Now that's true financial innovation! To do what regulators could not, yet still achieve the same objective.
 

zcf

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#7
$500 is sooooo low
I think government don't want too many low income earner in huge depts :sweat:

But I think they also didn't set limit on how many credit cards a person can apply :sweat:

But quite true, $500 can buy much oversea internet high value purchase.
 

TMC

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#8
This is bad. Take Taiwan the last few years for example. Students were rolling up huge debts with those no min income CCs. Depending on how other banks will push their own cards, Sgers with bad debt going to rise in numbers.
 

raincool2005

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Sep 10, 2005
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#9
I forsee social problems arising from his credit card. I feel that only those with stable income should be given credit cards.

Look at the young ones now... eat at sushi bar, buy nice clothes, watch movies, go pubs and discos, buy cigarettes, buy new handphones MP3..

i think MAS should re-consider this $500 credit card product to be released into the market. Why please the banks at the expense of the innocent young ? collect more tax from the banks ? but more social problems to handle ?

:think:
 

Apr 20, 2003
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But I think they also didn't set limit on how many credit cards a person can apply :sweat:
They will limit, indirectly. All banks are linked together with credit bureau. So when someone apply for credit card or any other credit facility, the respective bank can check his/her existing records. If too many, the bank will consider it as risky, so will reject the application.
 

zcf

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Apr 10, 2005
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#12
They will limit, indirectly. All banks are linked together with credit bureau. So when someone apply for credit card or any other credit facility, the respective bank can check his/her existing records. If too many, the bank will consider it as risky, so will reject the application.
That is if the credit bureau has the records, what happen if the person apply to all bank at the same time? The record would probably won't show?

Also, I know of some people has lots of credit cards (although some just want to enjoy the discount benefit), and thye still can apply for new credit card without any problem.
 

zcf

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#13
This is bad. Take Taiwan the last few years for example. Students were rolling up huge debts with those no min income CCs. Depending on how other banks will push their own cards, Sgers with bad debt going to rise in numbers.
Last time while I was study in UK, I know of banks which tempt students with great offer on easy loan, credit cards etc for their beer and night life etc, just to put them in debts, so when they graduated, they are like long term working slave for bank, some only earn enough to pay of the debt interest after minus their daily expenses. And they take ages to clear up their debts, hopefully the $500 credit will less likely to make this happen :sweat:
 

raincool2005

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#14
shall we write to MAS regarding this ? it is very important to educate the young population on credit usage and abuse. Has our MOE think about this as money education for the students ?

:think:
 

TMC

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#15
Last time while I was study in UK, I know of banks which tempt students with great offer on easy loan, credit cards etc for their beer and night life etc, just to put them in debts, so when they graduated, they are like long term working slave for bank, some only earn enough to pay of the debt interest after minus their daily expenses. And they take ages to clear up their debts, hopefully the $500 credit will less likely to make this happen :sweat:
funny I cant use the quick reply button anymore.

Hopefully the credit bureau will come up with regulation to limit the number of cards for this kind of scheme.
 

deckard

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Oct 13, 2006
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#16
kids just love to apply more cards to make their wallets fatter :bsmilie:
 

Chiang

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Feb 17, 2005
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#17
i think let the young 1 s learn how to manage credit is also a good start

there are + , - to the whole thing , but its the welder that determines the outcome.

i last time wanted to have credit card to much , only after owning 1 , do i realise that i got to pay for all my life style, so i still benefit from it.
 

Wai

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#18
Junior college student Sng Ren Zheng, son of a businessman, is keen to apply for a card after he turns 18 next month. 'I don't always have much cash on hand. A credit card will come in handy when I want to buy that $399 Hugo Boss shirt. If I wait for my $150 weekly allowance, the shirt might be gone.'[/URL]
wow..$150 weekly allowance, when i was in JC I dont even have $10 a day.

$399 branded shirt, that's like 2.5 weeks allowance?

but since his dad is a businessman, he can just beg his dad for a supplementary card, or go home open open his palm for $ what :dunno:
 

Apr 20, 2003
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#19
That is if the credit bureau has the records, what happen if the person apply to all bank at the same time? The record would probably won't show?
the record will also tell how many time the request has been made to be retrieved and by which banks. From there, each bank can also see if the person apply at the same time.

Also, I know of some people has lots of credit cards (although some just want to enjoy the discount benefit), and thye still can apply for new credit card without any problem.
You can have as many credit card as you want, as long as you can make payment regularly. Usage pattern of your existing credit cards is also shown in the credit bureau statement. So for those people having lots of credit card, but never used, banks will still be happily grant the application. Once they see default payment, it's guaranteed that your next application for any credit facility (including HDB home loan) will be rejected.
 

V

vince123123

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#20
Are you speaking on behalf of the Credit Bureau or are working there? Or do you have any authoritative source of reference which supports your statement that they will check how many cards one has?

Last I understand, no one checks. How do you think people can run up huge debts with 10 credit cards all maxed out?

the record will also tell how many time the request has been made to be retrieved and by which banks. From there, each bank can also see if the person apply at the same time.



You can have as many credit card as you want, as long as you can make payment regularly. Usage pattern of your existing credit cards is also shown in the credit bureau statement. So for those people having lots of credit card, but never used, banks will still be happily grant the application. Once they see default payment, it's guaranteed that your next application for any credit facility (including HDB home loan) will be rejected.
 

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