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Thais borrow early and get trapped in a cycle of debt


webfact

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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%

 

 

 

Interesting statistics - Here is a more comprehensive listing.

 

Although the headline figure in the OP sounds terrifyingly high, in the context of an indicator of imminent financial meltdown it seems there's still some way to go.  An informative article from The Atlantic, here.  

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1 minute ago, Joe Mcseismic said:

Financial literacy has been falling over the years. It should be taught at school.

Ive heard this many times over the years, and  I agree

however, I simply cannot remotely understand what is so hard about,

you have a credit card, you spend $1000, you have to pay back $1000, plus interest of 20% per annum for example , and if you only pay back 20%, you still owe the original $1000

 

or

 

you buy a $20k car, in a couple of years time its going be worth $10k, you lose $10k

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4 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. ????

Gold shops always make a surcharge  -3% or more - when buying on a credit card!

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A report recently stated that Thais are big spenders, the report was based on Visa credit spendimg!

 

It comes as no surprise Thai are in debt considering how corrupt Thailand is with high ranking officials lieing about their true assests or wearing expensive watches plus rings... T.I.T and it will probably get worse...

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That is the trap of so called developing/developed countries

 

Central Banks add the chains of debt one link at a time so you never notice the chain

You ease into it & are soon accustomed to dragging it thru life

 

Thai's had it good when they lived debt free. Now they are getting all modern ????

 

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1 hour ago, rkidlad said:

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. 

I wasn't justifying it, & your last sentence is unnecessarily rude.

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12 minutes ago, Joe Mcseismic said:

Financial literacy has been falling over the years. It should be taught at school.

What about wages not commensurate with raising living costs, losing jobs and lesser income (OT) from struggling companies in this harsh economic times. Not all debts are about buying cars. Could just be mundane household items, rents and schools expenditures. It's not all about financial literacy; most blames should be on poor and failing government policies to address structural issues.  

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23 minutes ago, Joe Mcseismic said:

Financial literacy has been falling over the years. It should be taught at school.

Something that is actively promoted by the push towards a "cashless society". All those that understand the use of credit cards would have grown up using cash. If we are pushed towards "numbers on a screen" , our grasp at how the physical, numeracy aspect of money works lessens. Much easier to overspend and the large corporations that profit , know this only too well.

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4 hours ago, gunderhill said:

Seems  like im the last generation not to  fall into the "stupidity trap"  of borrowing when saving for something before  buying it, which made it  all the more enjoyable when you finally  got it.

I  dont like borrowing for ANY reason and  after 18 yrs  old never  did except £15k for a  house back in the mid 1990's and even then the bank was reluctant ot lend such a small  amount.

People seem to think everythings  easy these  days, life  really IS  too easy, they all need a  good  kick to let them see it isnt.

Back in the mid 80s we started building our house as we had the money it got to a point where we had to get a construction loan all we wanted was $10,000 four different banks would not loan us the money finally a loan officer at a farmers and merchants bank figured out he could make a fortune if we defaulted so we got the money paid it off in a couple years

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1 hour ago, hellohello123 said:

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"

I use 3 year old phone bought it for 4k ????

However for work followup have tablet. So priorities are different.

This is absolutely no Thai or West matter. It is global problem among youngsters

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If it was really that bad surely Baht would be bad. I get the banking crisis which hit in 2008 started in USA and spread to the rest of the world was triggered by bad borrowing - so low income borrowers had teaser low rates which then increased and they later could not pay. Banks had lent too much and when the storm of non-payments  came they collapsed like Lehmans, RBS etc., Investors  had bet/ invested on the risk  too on these loans and Insurance/ Banks collapsed unable to meet payment. So now all western banks have to show they have plenty of capital. 

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It seems to me that many Thais that don't manage their finances properly look to those that do....and ask them for a loan!

 

It happens to my partner regularly by family, friends, even friends of friends. It's mostly asking for a few thousand baht to be paid back after a few weeks. she's learnt not to believe these people now, having written off a fair number of those small loans! She has done a couple of loans legally registered at the Land Office and uses the interest as her spending money. She also, as a result, now owns a piece of land that she doesn't really want!

 

I've known a number of people, neighbours mainly, that have had to disappear as they realise they can no longer afford to pay back the loans to the sharks. They do a quick moonlight flit to another province where they hope they won't be found. A very common practice, I think.

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The Illegal Money Lenders are quite Blatant in Thailand and do not seem to hide their Activities ? I do not know what percentage on a loan they charge but I would bet it is Very High Interest ???? They certainly do not help the Economy ? 

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I have predicted a crash for some time now making 1997 look like nothing. Not very bright of them spending money and once again copying America in everything the do. Millions of new cars no one can afford. New houses , and buildings no one can afford and thousands of homes and hotel rooms empty. In my town a few years back had maybe three hotels. Now over forty and still building. Even on weekends most of them empty. Really how dumb can you get ? Don,t worry about the Thai baht just wait it going to hit 60 baht to the American dollar when it all comes crashing down. That fast train is another huge boondoggle no one is going to ride and has already ruined once quiet areas. Good i hope it all falls down and this time America does not save them . If you can not afford something don,t buy it! Common Sense !

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6 hours ago, webfact said:

Thailand is now a top-ten highest household debt country among 89 countries worldwide and third highest among 29 Asian countries.

 

No worry. Plenty of expats sitting with 800K in their bank accounts required for extensions to visas. Can just take that.

 

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9 minutes ago, Thaifriends said:

I use 3 year old phone bought it for 4k ????

However for work followup have tablet. So priorities are different.

This is absolutely no Thai or West matter. It is global problem among youngsters

I have a s8+ love it to bits, hitting the 2 yr mark soon,

Hoping it last another 2 years. 

 

Will cry if it drops dead tomorrow and I have to spend another 1k On  a new one.

 

That's why it probably buy another new s8+ or s9 for hopefully under half full retail newprice

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Putting this down to some inherent fault in Thai mentality is wrong.  Historically, everywhere easy credit was offered (especially credit card credit), societies saw this same initial borrow quick and suffer long reaction.  It will take a generation or two or three before people learn (and teach their kids) to use credit sparingly and wisely. 

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6 hours ago, dcnx said:

The music will stop eventually.

 

I’m absolutely shocked to hear people making 9000 - 15,000b per month can’t afford a new car and the latest iPhone.  

It took me a minute to work that out, but now i can see how right you are, i used to wonder what jobs all these people did riding about on there new motorbikes all day, the source of income they have is going to there parents for money every day

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I use a 10 year old Nokia ' not smart' phone. I inherited it from a visiting Californian friend who was visiting Thailand for 6 months. It is still going strong!!  I am the extreme of phone frugality. 

I was well taught in the subject of appreciating and depreciating assets !!

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