BANGKOK – The University of Thai Chamber of Commerce has reported that about 87% of Thai credit-card holders maintain running balances on their credit cards, increasing concerns about growing levels of household debt.
Thanavath Phonvichai, the UTCC’s vice-president for research, said the survey of 1,198 people taken Sept 1-6 showed only 13% of people paid off their entire balance within the past three to six months. During that time, 28% of cardholders paid only 5% of their balance, 47.7% paid 10-20% and 11.3% paid nothing at all.
More significantly, the university’s centre for economic and business forecasting also found that cardholders earning less than 20,000 baht a month had outstanding credit-card debt almost three times their monthly earnings. The groups with the largest debts were students and “for hire” workers.
Mr Thanavath said it was worrisome to see students and younger people with outstanding debts, as it might lead to more-problematic spending behaviour in the future.
He said the university suggested that the government tackle the issue of credit-card and household debt by better educating people on self-sufficient living, reducing costs of living and managing interest rates. Job creation and fair distribution of income also would help, Mr Thanavath added.
The survey found that approximately 82% of those polled hold one or two credit cards. Most have been careful in using them due to fear of being indebted and or exceeding their credit lines. Average monthly spending totalled 6,534.99 baht and most used their cards only twice a month.
About 36.4% of respondents use their cards for buying goods to pay in instalments. Cash withdrawals were done by 31.5% of cardholders while 31.1% just use a card to replace cash.
It is expected that there will be a total of 20.3 million credit cards in circulation in 2014, with spending amounting to 1.53 trillion baht, up 5.2% from 2013. Average spending per card has been around 75,000 baht this year.