My Take | Are loan commercials dragging young people into a morass of debt?
TV ads offering instant loans could be drawing young people into debts they can’t repay
I used to think those personal loan commercials on television exaggerated the financial mindlessness of today’s young people. But having seen how quickly the latest Apple iPhones were sold out, those commercials may be more realistic than TVB soap operas.
Every night on prime time television, you have commercials offering loans without documentary proof or face time in an office. One features a couple having a grand time at a K-pop concert. They follow the pop group on an Asian tour of major cities and realise they are running out of money to pay for more plane tickets.
No worries, the boyfriend says, the money is just a phone call away.
In another advert, the woman asks why her boyfriend or husband is taking so much better photos lately. That’s because he has upgraded his photographic equipment. But that must cost a lot of money, she says. Well, he replies, he can easily get a loan to pay for it.
Credit card companies apply double-digit interest charges from the day you miss your deadline payment. You can just imagine how much those legalised loan sharks – sorry, personal loan companies – charge. Compound interest works for you if you invest wisely just as it can snowball into mounting debts if you borrow unwisely.