Credit card for students?

Dear Mr Tan,

A RADICALLY new type of credit card with no minimum income requirement and just $500 in credit has arrived in Singapore. Is this radical or ridiculous?

The Straits Times cartoon depict something is real and can be quite an issue as students start to live on credit and interest roll over.

Should this be encouraged? Will holding such a credit card be then a trend among the students? Should we start to allow our children to start living on credit at such a young age?

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REPLY:

It is convenient to use a credit card for payments. Students need this convenient mode of payment as well. Otherwise, they will have to incur a high cost to pay by cash.

We can educate the student to pay on time, and avoid the interest charges. They should not live on credit.

It is better for the student to apply for a debit card to use the convenience of making payment. It does not involve any credit. The money is deducted immediately from your bank account.

Some banks are willing to waive the annual fee for the debit card for the first 1, 2 or more years (subject to conditions).