MAS has finalized some new rules for credit cards and unsecured debt lending. This follows a public consultation exercise in Jan 2013.
The tightening of easy credit is a good thing to prevent people from falling into a debt spiral.
Some of the key policy changes include:
(a) Financial institutions (FIs) will need to review a borrower’s total debt and credit limits before granting a new credit card or unsecured credit facility, or increasing the credit limit on such facilities.
(b) FIs will need to disclose to individuals who roll over their credit card debts and revolving credit facilities the potential cost of doing so and how the debt will accumulate.
(c) FIs will need to obtain a borrower’s express consent for the amount of each credit limit increase.
(d) FIs will not be allowed to grant further unsecured credit to individuals whose unsecured debts with those financial institutions are more than 60 days past due, until all past due amounts are paid. Other FIs will also not be allowed to grant new cards and unsecured credit facilities or increase credit limits on existing facilities.
(e) FIs will not be allowed to grant further unsecured credit to individuals whose aggregate interest-bearing outstanding unsecured borrowings across all financial institutions exceed 12 months of their income for 90 days or more.
(f) Allow FIs to grant credit cards to individuals above 55 years of age who meet certain criteria.
You can view the full list of changes here: