Explainers
Overview
Financial institutions (FIs) must ensure that individuals meet the minimum criteria before issuing credit cards to them.
These criteria vary depending on the age of the individual. The rules also cover the credit limits that FIs can grant to an individual.
Regulatory credit limits are in place to help individuals to avoid borrowing beyond their means.
Note: A borrower's credit limit with an FI can exceed the regulatory limit if they are refinancing an existing debt owed to another FI.
For Individuals up to 55 Years Old
FIs can issue credit cards to individuals up to 55 years old if they meet one of these criteria:
- Annual income of at least S$30,000.
- Total net personal assets of exceeding S$2 million.
- Total net financial assets of exceeding S$1 million.
Note: Income can include non-employment income such as rental income.
Regulatory Credit Limit
For those up to 55, the regulatory limit on unsecured credit (total of unsecured credit cards and non-card credit facilities) is:
| Annual income | Regulatory credit limit |
|---|---|
|
≥S$30,000 to <$120,000 |
Up to 4 months’ income |
|
≥S$120,000 (or net personal assets exceeding S$2 million, or net financial assets exceeding S$1 million) |
No regulatory limit |
For Individuals above 55 Years Old
FIs can issue credit cards to individuals above 55 years old if they meet one of these criteria:
- Annual income of at least S$15,000.
- Total net personal assets exceeding S$750,000.
- A guarantor whose annual income is at least S$30,000.
Note: Income can include non-employment income such as rental income.
Regulatory Credit Limit
For those over 55, the regulatory limit on unsecured credit (total of unsecured credit cards and non-card credit facilities) is:
|
Net personal assets |
Annual income |
Regulatory credit limit |
|---|---|---|
| S$750,000 to ≤S$2m | ≤S$15,000 | Up to $2,500 |
|
≤S$2m |
>S$15,000 to <$30,000 |
Up to 2 months’ income |
|
≤S$2m |
≥S$30,000 to <$120,000 |
Up to 4 months’ income |
|
Any |
≥S$120,000 |
No regulatory limit |
|
>S$2m |
Any |
No regulatory limit |
Note: If the borrower has a guarantor whose annual income is at least S$30,000, the maximum credit limit of the guaranteed card is based on the guarantor’s income.
Borrower's Consent for Setting Credit Limit
When setting credit limit on a new credit card, FIs must either:
- Ask the borrower what their preferred credit limit is.
- Obtain the borrower’s consent for the credit limit amount.
This ensures borrowers are granted credit limits that they are comfortable with, for security reasons and protection against overspending.