Article from Malacca Hari Ini dated 20 July 2012
MALACCA: Credit card abuse are driving the youths here to the brink of bankruptcy.
Some, as young as 21, had the tendency of overspending on high-tech gadgets and living beyond their means.
“The government is very concerned as they are considered a ‘time bomb’”, said the Chief Minister’s Special Secretary, Datuk M. S. Mahadevan.
He added that young debtors under the age of 21 had come to his attention.
So far, five of such cases were reported, mainly by banks for defaulting their credit card payment.
“They overspend on gadgets and clothing and lead a lavish life-style,” he said during a briefing organised by The Credit Counselling and Debt Management Agency, (AKPK).
The event, added Mahadevan, was aimed at creating awareness in financial management.
AKPK key officials conducted the talk. The attendees included its General Manager (Corporate Services Division) Nor Fazleen Zakaria, Head of Corporate Communications Mohamad Khalil Jamaldin and Malacca branch chief Mansor Ali.
Citing a case, Mahadevan said a 21-year-old college student had swiped her credit card for a whopping RM2,000 for a lavish Valentine’s Day dinner at a five star hotel in Kuala Lumpur and is now unable to settle the dues.
“In another case, a 20-year-old purchased a smartphone and a laptop for his lover and is now blacklisted by the bank,” he added.
Mahadevan said the trend emerged when credit cards are easily issued to individuals without a proper check on their financial background.
He added that the young debtors referred to his office are now higher in number compared to adults who borrowed from illegal moneylenders.
Providing financial education through AKPK, said Mahadevan, is one of the government’s initiatives to curb credit card abuse among youths.
Such, he said, became the main agenda by the Malacca government as reported cases are rising.
Statistics by the AKPK indicated that the number of individual bankruptcy cases had risen by 11.2% to 18,053 cases in 2010 and increased by a further 6.2% to 19,167 cases in 2011.
During the first quarter, some 2,870-bankruptcy cases were recorded by the central bank.
Despite the alarming increase, Nor Fazleen said a few had stepped forward to seek AKPK’s assistance to manage their finances and restructure their loans.
“People still view bankruptcy as a stigma and those who are in financial difficulty should not be embarrassed to seek help from us,” she said.