Letters to Editor
Published Date: 27 September 2011

Response to "MAS rule unfair to seniors" (ST Forum - 24 September 2011)

Dear Editor,

Mr Raymond Koh Bock Swi asks why MAS does not customize our minimum income requirements for retirees who want to have a credit card (“MAS rule unfair to seniors”, ST Forum, 24 September 2011).

2   In fact, MAS recognises that flexibility should be given to retirees who have the means to finance their credit card spending but who do not earn a salary. This is why we allow individuals above 55 years old to qualify for a credit card if they meet a minimum annual income requirement of $15,000, which is lower than the $30,000 minimum requirement that applies to other applicants. This income can come from non-salaried sources, including interest, rental, and investment income.

3   MAS’ minimum annual income requirement for credit cards is aimed at discouraging individuals from spending beyond their means. Financial institutions should also have a rigorous process to assess the creditworthiness of a customer when processing a credit card application. They may have higher internal standards than MAS’ minimum requirements. For example, a financial institution may consider some forms of income, such as investment income, more volatile than others. It may also consider whether the individual has other financial commitments, such as other credit cards, when assessing his capacity to repay.

4   Finally, secured credit cards and debit cards are alternatives which are widely accepted and can be a convenient means of payment.

Angelina Fernandez
Director (Communications)