Banks egged me on, says $400,000 debtor
A woman who ran up a $400,000 debt with seven credit cards yesterday accused banks of using aggressive tactics to get customers hooked on plastic.
Winnie Yu, 26, who earns $20,000 a month working for an advertising company, says she has to spend her entire salary just to cover the minimum payments as the banks are charging her 24 per cent compound interest. She still owes $300,000.
'Now my husband has to pay for all the living expenses. My income goes on clearing the debts,' she said.
'At first I tried to run away from it. Whenever there was a letter from the banks I would just throw it away. But after I cooled down and thought about it, I realised it was not the way out.'
Ms Yu has applied for personal loans to help her clear her credit card debts, which she hopes to settle within five years.
'It is very easy to overspend with credit cards because you can easily lose track of how much you have spent,' she said.
Ms Yu said that while she only had herself to blame, the banks should shoulder some responsibility for aggressively drawing in customers.
'At first I had just two credit cards for daily shopping. But then the credit card companies started to send me a lot of promotional leaflets and asked me to sign up for more,' she said.
'On one occasion, a credit card company called me and said they had a new card ready for me to pick up.
'I checked my records and found I hadn't even applied for one of their cards.'
At one point Ms Yu had seven credit cards. 'The companies don't ask for proof of income or means to repay. You just give them a name and address and they give you a card,' she said.
'I started to use one credit card to clear another credit card's debts. In the end the amount ballooned like magic.'
Ms Yu now has four credit cards.