Missed card payments are climbing in Thailand, and for families already stretched by the cost of living the squeeze is real. In the first quarter of 2024, special mention loans on credit cards, meaning those 30 to 90 days overdue, rose to 12 billion baht, according to figures reported by Vietnam News Agency. That was up 32.4 percent from a year earlier and 20.6 percent above the last quarter of 2023.
What the numbers show
Data from the National Credit Bureau counted roughly 190,000 cards in default. Non-performing credit card loans reached 64 billion baht in the quarter, 14.6 percent more than a year before. Behind those figures sit about 24 million cards in circulation as of March, carrying around 550 billion baht in outstanding debt, a 3.2 percent rise over the previous year.
Many of the people borrowing are young. The bureau’s data show that of the roughly 36,000 new cards issued over two years, 23,000 went to millennials aged 27 to 44.
A higher minimum payment
National Credit Bureau chief executive Surapol Opastien tied part of the rise to the Bank of Thailand’s decision to lift the minimum monthly payment on cards from 5 percent to 8 percent in January. The lower rate had been a pandemic measure meant to ease the burden on borrowers. The central bank had planned to return to the normal 10 percent in 2025. Surapol also pointed to fragile economic growth, an uneven recovery in incomes and higher living costs as pressures on cardholders’ ability to repay. With special mention loans surging, he said, the pressure for more non-performing loans was mounting.
The Credit Card Club had asked the central bank to delay the increase, worried about weak repayment capacity. The bank said it would monitor the effect of the higher minimum payment.
Relief from the central bank
By August 2024 the picture had prompted further action. In a report carried by Open Development Thailand, Bloomberg described a set of relief steps for people falling behind on mortgages and card bills, as the central bank went after household debt that the report called the heaviest in Southeast Asia. The 8 percent minimum repayment, which the bank had proposed raising to 10 percent from 1 January, would be kept until the end of the following year. Borrowers unable to meet the minimum could seek to restructure into term loans repaid in instalments. The bank also relaxed loan-to-value norms to encourage consolidation of home and retail debt, and for those carrying persistent debt it stretched the repayment window from five years to seven.
For ordinary households, those extra years and the frozen minimum payment are the part that touches daily budgets, with 24 million cards in wallets across the country.
Sources
- Thailand faces credit card default risks
- Thai Central Bank Unveils Measures to Tackle High Household Debt (Bloomberg report, Open Development Thailand)
