Malaysian authorities are worried over the soaring cases of credit card debts in the country with 89 people being declared bankrupt last month.
Terming the trend as “worrying”, Deputy Domestic Trade and Consumer Affairs Minister S Veerasingam blamed the easy availability of plastic money for the problem.
The requirement to acquire a card in Malaysia is a starting salary of RM1, 000 (Rs 8,500 rupees) a month, local media quoted the minister as saying in Kuala Lumpur on Thursday.
Veerasingam said some, especially the young, seemed to be having a “party” with credit cards by spending excessively on clothes and accessories. A total of 8.8 million credit cards had been issued nationwide as of January this year.
In 2005, 1,497 credit card holders were declared bankrupt, representing an increase of 34 per cent over the 1,117 credit card defaulters in 2002. In 2004, the number was 1,397, New Straits Times said.
Veerasingam said most problems began when fresh graduates applied for a credit card and spent beyond their means.
“They sometimes hit the limit allowed on the card, spending up to five times their monthly salary. Then they get blacklisted by financial institutions and suffer their whole life,” he said and appealed to youths who had just started working not to use credit cards until they had savings in their bank accounts.