June 21, 2010
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News: Singapore First Time Borrowers The Most Loyal
According to a recent report by the Credit Bureau Singapore (CBS), credit cardholders in Singapore spend the largest portion of their debt on the first card they are issued. This means that banks would be wise to develop marketing campaign that target young individuals who have never been issued a credit card in the past. If Singapore residents are more loyal to the first lender to issue them a card, it stands to reason that card issuers in that country would aggressively pursue these individuals. Future credit card sales would not be the only thing at stake, young lenders will soon be needing a home, car, and quite possible a recreational vehicle. There’s no question this is a very valuable group of consumers.
Research indicates that Singapore has over 746,300 consumers that have two or more credit card accounts. Of that amount, 40 per cent maintain the highest outstanding balance on the card that was first issued to them. Based on a CBS report, less than 31 percent of cardholders with two or more accounts charge the largest amount to the second issuer. The number excludes those cardholders who did not use their credit cards at all during the month of April as well as approximately 100,000 individuals who use a $500 limit card for those low income cardholders. That’s an 8 percent difference. In terms of hundreds of thousands of cardholders, the number is huge.
DBS Group, Citibank and United Overseas Bank are the three biggest card issuers in Singapore, however, the research did not indicate lender rankings in terms of number of credit card in circulation. Overall, Singapore has 12 card issuers. The report did indicate that the majority of cardholders held a card with each of the three top banks, however, only used the cards from two of them. There are over 300.000 truly loyal cardholders in Singapore who only carry one card. These customers a typically men age 55 and older whereas women aged 35-39 are the most likely to own cards from than one lender. It is a good practice for a lender to issue a second card knowing the customer already has at least one? According to the report, the answer is "yes." Why? It appears that individuals with more than one account are more likely to pay their bills on time.