Singapore Profit

Citibank is offering a credit card for young people from 18-35 and earns less than $30000, the minimum sum for credit card applications for the longest time. The great thing is this group of people get to have the benefits of having a credit card as mentioned in my earlier post.

They plan to allow up to $500 worth of unsecured credit. It is definitely more convenient to people who needs to use a credit card to pay for something. If such a card existed when I went to Germany for a month-long immersion programme during my university days, I would not be constantly worrying whether my money could last me for the time I was overseas. The fear of not having enough money can be quite paralysing.

During that period, I was not yet 21 years old, and banks were pretty strict on that count and DBS refused to issue a supplementary card to me (actually, they didn’t even reply to seven though I was just 3 months away from turning 21. Only those who were studying overseas for longer period could apply. With this Citibank offering, this group of people need not fret too much.

However, I do have some concerns. The interest rate is 28%, higher than the 24% for normal credit cards. This group is already earning very little, or not. If they get into debt, the interest will snowball quickly.

Citibank said that if the customer does not repay the minimum sum, it will suspend the usage of the card. Hopefully this will be enough. I don’t really like the idea of students being in credit card debt before they start working. If they target the working crowd that does not earn that much, it may not be that bad.

It would be terrible to get a poor credit rating so early in life, especially some students can be really reckless with their spending, and they may not realise the consequence of having a poor credit rating. It could affect their applications for car and housing loans or even credit cards. Prudence is very important.

Sarah Tan – SingaporeProfit.com

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