__________________________________________________________________________________________________
Question
To ask the Deputy Prime Minister and Minister for Finance what is the rationale for the recent relaxation on supplementary cards by Monetary Authority of Singapore (MAS) in the light of the recent concern over mounting credit card bad debts and calls for more prudence in spending.
Answer
1. There is no relaxation in the availability of credit to individuals. The recently released regulations on credit and charge cards preserve the fundamental objective of discouraging Singaporeans from spending beyond their means by curbing the easy availability of consumer credit.
2. We have removed the limit of two supplementary cards per principal card account. Feedback from card issuers showed that in practice, the limit has had an unintended effect. Because of the limit, a cardholder who wishes to have more than two supplementary cards tied to his account will need to apply for an additional card from another issuer. As a result, the overall credit available to the cardholder is raised. Therefore, lifting the limit will remove this unintended outcome, while keeping the overall credit limit available to the cardholder unchanged. In any event, a cardholder should exercise discretion when applying for supplementary cards tied to his account, since he is liable for charges incurred by the supplementary cardholders.
3. We have also allowed a credit or charge card issuer to issue additional cards to its existing principal cardholders without first having received an application. However, there should be no increase in the credit limit granted to the cardholder. For the cardholders' protection, the cardholder must first notify the issuer that he accepts the use of the additional card and its accompanying terms and conditions. Otherwise, the cardholder will not be liable for any amount charged to the card.
* * *