We owe agency a debt of gratitude


Article from New Sunday Times


IT is astounding that more than 350,000 people were on the brink of bankruptcy with an accumulated debt of RM337 million, until they were saved by the Counselling and Credit Management Agency.


The agency was a saviour to these people, who had no way out and were contemplating suicide. The agency counselled and helped them to manage their finances. It also recommended jobs for those with no jobs.


Fresh graduates and young professionals are not able to make ends meet because bank loans and debts take up a sizeable chunk of their income.


The two biggest items are housing and car loans. The rising rate of household debt, due to rising prices of goods and services, and credit card bills, has put many households in the red.


Bank Negara has introduced measures to prevent excessive household debt by reducing housing loan and personal loan repayment tenure.


Young people will find it more difficult to buy homes as banks reduce the housing loan period. More young people are getting into debt because of inflation and rising cost of living. Some are living beyond their means and struggling to make ends meet. Their lack of financial knowledge and education, coupled with expensive lifestyle choices, put the younger generation in financial difficulties.


Credit cards have allowed young people to spend beyond their means. Previously, people spent only on what they could afford but, today, many spend money that they do not have. Young adults need to be responsible using credit cards. Buy only what is necessary.


Pride is the reason why people buy things they do not need. They just want to impress people they do not know. It would be wise to earn before you spend, and not spend before you earn.


Credit cards should not be made available to everyone and the minimum wage to own a credit card should be raised. Individuals should not have more than one credit card.


Many young couples spend lavishly on weddings and honeymoons, which make them debtors at the beginning of their marriage. Young people should be encouraged to use debit cards and not credit cards if they are not able to pay in full each month.


The young should be equipped with knowledge on how to handle money matters.