At least two banks in Singapore have announced changes to interest charges and fees that apply to credit card bills.
One of them is HSBC, which is raising the interest rate on outstanding credit card balances from 25.9 percent per annum to 26.9 percent.
Late payment fees – an additional flat fee imposed when credit card holders do not pay the minimum sum by a specified due date – will also go up from S$55 to S$100.
The bank is also increasing administrative fees for foreign currency card transactions from 1.8 per cent to 2.25 percent.
These changes will take effect from Jan 4, 2023.
HSBC last adjusted its interest charges in August 2017, while the administrative fee for foreign currency transactions has not been revised since November 2018.
The upcoming revision in credit card fees and charges is part of the bank’s “periodic review” and is “in line with industry standards”, a spokesperson told CNA.
The bank also said it has not observed any major increase in late payment charges this year.
Another foreign lender, Maybank, revised its fees and charges back in October.
The interest rate for credit card holders who do not pay their bills in full by the due date or take on a cash advance now stands at 26.9 percent per annum, up from 25.9 percent.
Those with late payments will be charged either 5 percent of the minimum payment due or S$100, whichever is higher. Before this, the fee was 5 percent of the minimum payment due, or S$80.
Maybank also hiked the fee for taking a cash advance – a cash loan taken out against one’s credit limit. This is now at a minimum of S$15 or 6 percent of the cash loan, whichever is higher, compared to S$15 or 5 percent previously.
Other lenders that replied to CNA’s queries would only say that their fees and charges are evaluated regularly.
DBS, Singapore’s largest bank, said it conducts “periodic reviews of the interest rates charges based on market conditions and economic trends”.
Its interest charge on outstanding credit card balances has been at 26.8 percent since end-2018.
“Credit card holders will be informed in advance about any adjustments to credit card interest rates,” the DBS spokesperson said.
OCBC, whose credit card interest charge is currently at 26.88 percent, said it did not make any changes to its interest rates and fees this year. But these are “evaluated on a regular basis” and “may be adjusted according to market conditions”.
Data from the Monetary Authority of Singapore (MAS) showed credit card debt in Singapore on an uptrend but credit quality – a measurement of an individual’s ability to repay their debt – has remained healthy.
Outstanding credit card balances rose by 16 percent year-on-year in the third quarter, the strongest increase since 2011, according to the MAS’ annual financial stability review released last month.
Outstanding credit card balances as a percentage of personal disposable income also rose slightly to 4.1 percent in the third quarter.
However, MAS noted that the credit quality of short-term debt “remained healthy”.
