Thais borrow early and get trapped in a cycle of debt

[Yinn]

3 hours ago, ezzra said:

Inherently, Thais mentality is 'Let's spend now and think how to repay it later' are also bad at money managements, loyalty  and diligence to a workplace not to mention honesty, plus their family commitments to help each other at all time, so no wonder most thais are cashless and wanting, and the never ending chase for luxury items puts them in the hock even further...

Farang mentality so clever?

 

Household debt to gdp.

 

thailand 78%

australia 120%

denmark 115%

canada 101%

swiss 129%

norway102%

new Zealand 94%

uk 95%

ireland 117%

 

 

 

[M71]

The Bansksters began turning Thais into consumers with gusto about 50 years ago - such a shame. Now that the world's fiat money pyramid scheme is running short of consumers to keep the scam going they are turning Africans into consumers sucking their blood now.

 

Only three countries left without a Central Bank now - Iran, North Korea and Cuba. You know, the countries the controlled western media labels terrorist countries.....

[geoffbezoz]

8 minutes ago, Joe Mcseismic said:

There is already a law that states the maximum interest allowed is 15% per annum.

Very hard to enforce............so, it isn't.

Actually I have heard of two people reporting loan sharks to the police in my area due to the interest rate being 120% per year !! The problem seems to be intimidation by the loan sharks and the threat of bodily harm if they get to know that they have/will be reported as the police can not readily protect those who reported the loan sharks from the loan shark's thugs.

[miamiman123]

This is the “plan” worldwide capitalism in SE Asia. Who would have ever thought? 

[Joe Mcseismic]

I believe that the consumers of the world have forgotten the difference between wants and needs.

I blame easy credit and mass advertising.

[Snuller21]

They start to buy a new Motorbike, and give 99 Baht deposit, and pay 2000 per month. Never finish it before they buy a new one again, and then again and again and again, then get a new mobile. Same happen there and again and again. Then a car, and happen again and again. Then borrow money for house, and then it happen again. Typical life of an Thai. Sadly it is going that way. Again and again. Then it happen again.

[geoffbezoz]

19 minutes ago, Joe Mcseismic said:

There is already a law that states the maximum interest allowed is 15% per annum.

Very hard to enforce............so, it isn't.

But why arn't credit card companies restrained by this law ?

[Joe Mcseismic]

Just now, geoffbezoz said:

But why arn't credit card companies restrained by this law ?

I have no idea.

[rkidlad]

2 hours ago, faraday said:

The way some people have posted on this thread, is as if there aren't Credit cards/very high interest loans/scratch cards/ sub prime mortgages in Farangistan.

 

But then by conveniently ignoring those facts, it gives some the opportunity to deride those 'greedy thais'.

And do you think when the credit card companies come knocking for the money they're owed, they'll accept the excuse of "they're also in debt in Farangistan"? No, they won't care. 

 

Go onto the local forums where you're from. You won't see people justifying the actions of what happens in their country by saying other people do it too. That's because it's how children think. 

[Ireland32]

4 hours ago, RichardColeman said:

I think we can all see the signs that Thailand is going to really have it hard soon, and once those borrowers start being laid off as there's nobody to export too and the tourists are not coming or spending that debt is going to be near the 90% mark pretty quickly as the previous years they had reliable income streams

And all Farang Bf and husbands abandon the place, teach these greedy girls a lesson

[heybuz]

Bad at money management, most I think never made it past grade three and if they did the system taught them nothing.

[Benmart]

3 hours ago, moontang said:

the people closest to them are often their worst enemies.  At least they are not Catholic poverty breeders.

Nothing like bringing religion into a topic that was not mentioned in the original post.

[cardinalblue]

So all those SUVs and trucks I see on the road are not paid for? 

[kwak250]

My nephew and his wife started selling yam at a local Market.

After about 1 month they bought a brand new Ford Ranger.

They say its easy to pay off only 8000 a month.

They say they esdily clear 700baht a day.

They have 2 young kids 8000baht a month for 7 years debt and now its raining they are struggling to pay per month.

Its so essy to think"i can pay that easily"  when you sold lots of food for a few days but 7 years..

The moral of the story is.

 

Dont by a Ford

[nong38]

Financial planning and budgeting is unknown here and will remain a mystery to most, another educational failure.

[kingstonkid]

The challenges of this is that there is no education.  In Canada and I will guess the u.s. the university students are given credit cards with small limits. No one teaches the systems of staying out of debt.

[sahibji]

not unique to thailand. happens in many countries.

[hellohello123]

3 hours ago, faraday said:

The way some people have posted on this thread, is as if there aren't Credit cards/very high interest loans/scratch cards/ sub prime mortgages in Farangistan.

 

But then by conveniently ignoring those facts, it gives some the opportunity to deride those 'greedy thais'.

exactly, the western farang world, america, australia , and some parts of europe,

you guys arent much better in money management,

 

the number of times i hear people from forgein countries who go these countries say "ive never met a bunch of people who cant/wont plan more than a week ahead and live pay packet to pay packet"

[hellohello123]

1 hour ago, Joe Mcseismic said:

From my own observations.

A Thai person wants to borrow 10,000 Bt.

Interest is 5% per month.

The mindset is "I only have to pay 500 Bt a month", which is easily do-able.

There is no thought whatsoever about paying back the principle.

 

this is no different to many farang citizens too!

 

I even hear "woo, I got a new credit card, im rich!"

 

which absolutely astounds, while im no financial einstein myself

 

off topic, but when I was 20, I had a colleague who had a 10k credit card debt, and he got a tax return of about $10k, and he said he wasnt going to pay it back straight away because he didnt want to the bank to get all teh money back straight away.....

mind you he wasnt a dumb kid either

 

or the millennial (or whatever they are called) who was complaining no money to me about getting a $400 phone bill x3 months from too much texting/data usage, I told her there were $99 plans where it was unlimited, her reply "ill think about, actually, I cant be bothered, but I might upgrade to the new iphone coming out in a few months even though my phone is only 6 months old"

Edited August 13, 2019 by hellohello123

[Runamile]

Long thread. But as far as I got with it saw nothing on high rates of relationship (marital and non-marital) break-up, thereby high rates of single parenthood and that single parent bearing the whole financial onus of having had the children. Huge creator of debt.

[Farangwithaplan]

1 hour ago, Joe Mcseismic said:

From my own observations.

A Thai person wants to borrow 10,000 Bt.

Interest is 5% per month.

The mindset is "I only have to pay 500 Bt a month", which is easily do-able.

There is no thought whatsoever about paying back the principle.

 

I had that same attitude when I was young. I got myself in serious non deductible debt and had 2/10th of nothing to show for it. Fortunately I lived in a country where i could get a decent paying job and had the skillset to get a second and third job and through perseverance and some good fortune paid off the debt in total. After kicking off most of the debt, I started focusing on attaining new skills. Then at a time when people are settled down making inroads to paying of their homes I started from a balance of zero debt and began to accumulate.

 

If I had been in Thailand where the horrendous loan sharks have astronomical rates of interest, I would never have got out of the hole I built for myself. It still surprises me how teachers and others with 'quality' jobs can live on what they do. If those people don't have family support or have a health issue their life can take a real turn for the worst.

 

[Hank Gunn]

44 minutes ago, geoffbezoz said:

But why arn't credit card companies restrained by this law ?

Probably because credit card debt is not secured by any tangible asset. For example, with loans for a car or house, the house or car can eventually be repossessed and in theory, the bank/lender can recover some or most of the debt by selling that asset on. (Most banks have whole divisions for real estate properties.)

 

Credit cards debt on the other hand is not secured by anything and is therefore of much higher risk, no matter who is borrowing. I don't know about other countries, but in the US, if a card is lost or stolen, the card holder is legally only on the hook for the first $50 (or at least that used to be the case).

[Enzian]

3 hours ago, Tayaout said:

I paid my wife credit card. In exchange she had to surrender it to me. What is ridiculous is that she maxed it buying gold for her family. At least gold is up. ????

One of my credit card accounts has my Thai girlfriend as an associate holder, because it is useful when booking domestic flights for her alone, but the physical card with her name on it is in a safe in the US. And I NEVER let her get her hands on any of my cards. At least she's smart enough, or I should say experienced from earlier experiences, not to have her own credit or debit card. She recently asked for a second gold necklace, and I declared no more gold till she pays off an outstanding debt she has to one of her sisters; that will take a while, thank Buddha.

[lifeincnx]

In addition to Thais maxing out their debt, bank deposit protections (designed to protect depositors against the loss of their deposits with financial institutions up to a certain limit) have were cut from 100 million baht in 2008 to 50 million in 2012, to the current 5 million baht protection limit.

But next week, the deposit coverage limit is cut to 1 million baht PER DEPOSITOR, NOT PER ACCOUNT. 

https://www.bangkokbank.com/en/Personal/Tips-and-Insights/Save-and-Invest/Practical-advice-on-deposit-protection

[khunpa]

1 hour ago, Yinn said:

Farang mentality so clever?

 

Household debt to gdp.

 

thailand 78%

australia 120%

denmark 115%

canada 101%

swiss 129%

norway102%

new Zealand 94%

uk 95%

ireland 117%

 

 

 

The big difference is that Thailand has no welfare system.

[kensisaket]

There is not a "debt" problem in Thailand.  There is however an "unpaid" debt problem.  I am sure credit card debt is viewed the same way personal loan debt is, if I ignore it it will go away.  

[hellohello123]

3 minutes ago, kensisaket said:

There is not a "debt" problem in Thailand.  There is however an "unpaid" debt problem.  I am sure credit card debt is viewed the same way personal loan debt is, if I ignore it it will go away.  

im still not convinced that many people think it will go away and never to rear its head again, but more a bury your head in the sand approach

 

Edited August 13, 2019 by hellohello123

[Isaan sailor]

This can be expected, when a 3rd world country races full speed into the 21st century—motorcycles, miracle fertilizers, TV, internet, cars, trucks, malls and an influx of westerners.   And now, with an overpriced Baht—it’s all crumbling...

[garzhe]

4 hours ago, Cadbury said:

And the government is hell bent on delivering a stimulus package which will include easier loan access for workers, small business and farmers. 

That proves they don't give a toss about the terrible household debt situation. Added debt for these people is just a means to and end to get the economy stimulated. They don't care about the personal damage it does to the lives of people.

As it happens the man who appointed himself to manage the economy is the same man who yesterday expressed his faux concern for low income people; the one's who will be tempted into taking the easy loans in his stimulus package. 

What does the National Economic and Social Development Council think of that?

Farang tink too much !

[rwill]

As others have said it is not just a Thai problem.  We live in a time where most people want to have instant gratification.  And the problem is not just on a family level.  Every government I know of operates the same way.