Credit card debt

[HashBrownHarry]

My girlfriend has just told me she has 560K credit card debt, 1 card.

 

She pays 17K per month, 13K of which is interest!

 

If she loses her job ( she makes 35-40K pm ) and can't make the payments, what happens to the debt?

- Do the 'heavies' come to her apt and take her belongings of value?

- Does the debt go to family, parents / brothers or sisters / kids?

- Is it written off?

 

She does n't really seemed concerned at all about the size of the debt, if she continues to make payments as she is now it will take approx 12 years to clear - crazy!

[colinneil]

Well HashBrownHarry, you certainly have found yourself a cracker.

You want advice, get out now, before she drags you into her problems.

[bkk6060]

Not unusual here.

Especially the Hiso Bangkok hotties who have "normal" jobs.

Big debt.

 

It is Civil and commission law.

The CC company will take you to court.

They will take all her property from her.  Car, land, whatever.

And, she cannot get another loan or credit card.

There is something in the statue about going to jail but I believe that is rarely enforced.

 

Just to add from my experience a guy may be better off with a village girl.

I know some brag about the Hiso types with good jobs but they always from my experience, bring their own issues.  Wanting to be western.

Simplicity in your choices here in this area I think is a better decision.

Edited February 2, 2020 by bkk6060

[jadee]

Depends on the credit card provider - if she stops making payments, as bkk6060 says, they may take her to court, of they may sell the debt to a debt collection agency who will then try to recover whatever they can. 
With all due respect, your most pressing issue isn't what happens IF she loses her job but what happens WHEN she asks you to 'help'. Best of luck with that. Seriously. 

[Pib]

That's what happens when a person runs up a high debt and can't make large enough monthly repayments to avoid interest charges eating their lunch.

[ChaiyaTH]

I do not believe she has to pay 17K on just 560K baht. As well there are many options for more reasonable terms without even getting near to a court.

There is more to it, as always. Get rid of her.

Also, she should obviously not lose her job and pay off more / faster if she worries about that. If she defaults on debt, her name is bad with banks for life.
She should start paying off in direction of 10K excl. interest if wanting to progress faster. This will make the interest much lower after 1 and 2 years too.

And if that is her only debt, with a job paying that much, she should be able to transfer the loan to elsewhere, many banks offer a year interest free.
She could pay off this old bad debt, then pay the 17K a month back to new debt as no interest is charged yet, her debt would be +- 40% less in 1 year time.

Might even get the chance to do the same thing again in year number 2, paying almost no interest at all and being debt free within 3 years max.
The problem with Thais often is, they abuse these interest free periods by not paying back at all. Or just the very minimum. 

Edited February 2, 2020 by ChaiyaTH

[BritManToo]

38 minutes ago, HashBrownHarry said:

My girlfriend has just told me she has 560K credit card debt, 1 card.

New girlfriend time, next time choose one with less debt.

I know everyone on this forum says get yourself a woman with a decent job, but they're all loaded with debt.

A bar girl scrabbling around for the next months rent to her 3,000bht condo is so much easier to satisfy!

Edited February 2, 2020 by BritManToo

[Lacessit]

AFAIK most Thais have very little financial education. Debt is way too easy to get into here. It suits the elite here to keep it that way.

It depends on whether the OP wants to help his GF. And whether it would stretch his own finances.

He would probably do better encouraging her to pay the debt off faster, by cutting down on her spending.

If she won't listen, dump her.

 

[GarryP]

The minimum payment of Thailand based credit cards increased from 5% to 10 % a few years ago. So at 10% surely her first repayment would be 56,000, then 50,400, etc.  So the figures don't seem to add up. 

[sammieuk1]

You could add a sausage hash brown and help her out say 8,500pm that would be the cream on top????  

[Pib]

"Typically," for Thai credit cards the expected monthly repayment is at least 10% of the outstanding balance....and annual interest on Thai credit cards is usually around 20%.  So, a Bt560K debt on one card would require a Bt56K month payment versus Bt17K.  But I expect there are Thai credit cards that offer longer payback periods....lower monthly repayments....but the interest build-up will eat a person's lunch that way.

 

To get an idea of a typical Thai bank credit card application which states the repayment requirements and what they will do if you don't repay, see below Bangkok Bank credit card application form which is in Thai and English.

 

https://www.bangkokbank.com/-/media/files/personal/cards/creditcard/document-download/creditcardapplication_nov2019_th-en.pdf?la=en&hash=69AC7D8B9BE0BF1BC2C05D7F87426A82B9CFF0E8

[Don Mega]

2 minutes ago, GarryP said:

The minimum payment of Thailand based credit cards increased from 5% to 10 % a few years ago. So at 10% surely her first repayment would be 56,000, then 50,400, etc.  So the figures don't seem to add up. 

Yeah was gunna post  the same, something is off with the OP's numbers.

 

I wonder if the GF is telling porky pies... If not I'd love a credit card with that kind of limit and minimum repayments of 3% !!!

 

[NCC1701A]

1 hour ago, HashBrownHarry said:

My girlfriend has just told me she has 560K credit card debt, 1 card.

i hope you suggest she cut up all her credit cards as she is not a responsible person (yet).

don't help her with money in any way.

if you love her just give her emotional support and try to find the best options for her. 

 

Edited February 2, 2020 by NCC1701A

[tinca tinca]

38 minutes ago, colinneil said:

Well HashBrownHarry, you certainly have found yourself a cracker.

You want advice, get out now, before she drags you into her problems.

well said Colin.....Lanky lad.....

[holy cow cm]

560k is a big deal. And they worry about Expats getting even a secured CC here putting up there own money as collateral. Time to dump her or show her that even deaf girls in front of Nana Hotel can freelance making a few thousand baht a night. 

[ChaiyaTH]

21 minutes ago, Pib said:

"Typically," for Thai credit cards the expected monthly repayment is at least 10% of the outstanding balance....and annual interest on Thai credit cards is usually around 20%.  So, a Bt560K debt on one card would require a Bt56K month payment versus Bt17K.  But I expect there are Thai credit cards that offer longer payback periods....lower monthly repayments....but the interest build-up will eat a person's lunch that way.

 

To get an idea of a typical Thai bank credit card application which states the repayment requirements and what they will do if you don't repay, see below Bangkok Bank credit card application form which is in Thai and English.

 

https://www.bangkokbank.com/-/media/files/personal/cards/creditcard/document-download/creditcardapplication_nov2019_th-en.pdf?la=en&hash=69AC7D8B9BE0BF1BC2C05D7F87426A82B9CFF0E8

The interest on 560K with 20% would be 112K a year / 9.3K a month + paying off the principle (5600 baht a month if 10%) making a total of 14.9K and not 56K.
I do not know anyone who pays off 10% of their balance in just a month.

Edited February 2, 2020 by ChaiyaTH

[Don Mega]

3 minutes ago, ChaiyaTH said:

The interest on 560K with 20% would be 112K a year / 9.3K a month + paying off the principle (5600 baht a month if 10%) making a total of 14.9K and not 56K.

10% of 560,000 is 5600.......Am I missing something here ?

Edited February 2, 2020 by Don Mega

[Pib]

12 minutes ago, ChaiyaTH said:

The interest on 560K with 20% would be 112K a year / 9.3K a month + paying off the principle (5600 baht a month if 10%) making a total of 14.9K and not 56K.
I do not know anyone who pays off 10% of their balance in just a month.

 

Partial quote from above Bangkok Bank weblink.  Typically a credit card monthly repayment amount is a minimum of 10% of the card's "outstanding balance" which includes past purchases, new purchases, cash advances, interest charges, etc.

Edited February 2, 2020 by Pib

[PatOngo]

1 hour ago, HashBrownHarry said:

She does n't really seemed concerned

Why would she be, she's told everyone she has a farang boyfriend!

 

 

Edited February 2, 2020 by PatOngo

[Don Mega]

8 minutes ago, Pib said:

 

Partial quote from above Bangkok Bank weblink.  Typically a credit card monthly repayment amount is a minimum of 10% of the card's "outstanding balance" which includes past purchases, new purchases, cash advances, interest charges, etc.

I have credit cards with K-Bank and CitiBank and they too are 10% minimum repayment.

[eisfeld]

1 hour ago, HashBrownHarry said:

My girlfriend has just told me she has 560K credit card debt, 1 card.

 

She pays 17K per month, 13K of which is interest!

 

Those numbers don't even come close to what I'd say are real world numbers in Thailand.

 

1. The interest seems too high

2. The monthly repayment of principle seems way too low

 

Do banks in Thailand allow a debt limit of over 10x the monthly income of the person?

What bank is this card supposed to be from?

 

The amount of debt and small monthly payment might hint that this is maybe from a car finance plan.

[Don Mega]

Just now, eisfeld said:

 

Those numbers don't even come close to what I'd say are real world numbers in Thailand.

 

1. The interest seems too high

2. The monthly repayment of principle seems way too low

 

Do banks in Thailand allow a debt limit of over 10x the monthly income of the person?

What bank is this card supposed to be from?

 

The amount of debt and small monthly payment might hint that this is maybe from a car finance plan.

Loan shark maybe ?

[eisfeld]

3 minutes ago, Don Mega said:

Loan shark maybe ?

Could also be. Not sure what they charge around BKK but I've seen way higher rates than the OPs numbers in other areas. Hard to tell.

[ChaiyaTH]

25 minutes ago, Pib said:

 

Partial quote from above Bangkok Bank weblink.  Typically a credit card monthly repayment amount is a minimum of 10% of the card's "outstanding balance" which includes past purchases, new purchases, cash advances, interest charges, etc.

Yes but the secret to this is, they pay the 10% minimum and then withdraw the same amount again. So effectively there is no minimum aside of interest.
That is why they all have so many cards in their wallets. Their salary might go to outstanding balances to then use it all up again from the cards. 

Many people in general are quite ignorant over 15-20% yearly interests on being in red digits. They think it is not that bad (while it is, very expensive).

Edited February 2, 2020 by ChaiyaTH

[Beggar]

1 hour ago, bkk6060 said:

 

Just to add from my experience a guy may be better off with a village girl.

 

Avoid even this. If you are looking for a real friend take a water buffalo. It can work for you and will only cost you money when it is sick. 

[Pib]

Yeap, "Thai" credit card repayment and interest are different (tougher) that what westerners are use to in their home country where interest can be a lot lower, minimum monthly repayment requirements less, and repayment period can literally go on forever as long as you make the minimum monthly payment amount.  Of course repayment for a Thai card could go on forever if the person meets the minimum monthly repayment amount which is typically 10% of outstanding balance.

[ChaiyaTH]

6 minutes ago, Pib said:

Yeap, "Thai" credit card repayment and interest are different (tougher) that what westerners are use to in their home country where interest can be a lot lower, minimum monthly repayment requirements less, and repayment period can literally go on forever as long as you make the minimum monthly payment amount.  Of course repayment for a Thai card could go on forever if the person meets the minimum monthly repayment amount which is typically 10% of outstanding balance.

Tougher? In most EU countries you can not even get 1 credit card, even if you earn like near 2000 euro a month.
Here they can get millions of credit when earning 20K baht.

Interest rates are often 15% too, so that is not that much higher here. The risk is to it too. 
If debt is used smart, Thailand is a really good country in reality. You get the chance to do something.

My wife uses some credit for cashflow to buy merchandise and is always repaid within 2 months,
the interest is no issue as the profit she makes is 20% in a month.

Edited February 2, 2020 by ChaiyaTH

[Don Mega]

1 minute ago, ChaiyaTH said:

Here they can get millions of credit when earning 20K baht.

 

Which banks in Thailand give "millions"  as a credit limit on a 20k salary ?

[Pib]

2 minutes ago, ChaiyaTH said:

Tougher? In most EU countries you can not even get 1 credit card, even if you earn like near 2000 euro a month.
Here they can get millions of credit when earning 20K baht.

Interest rates are often 15% too, so that is not that much higher here. The risk is to it too. 
If debt is used smart, Thailand is a really good country in reality. You get the chance to do something.

My wife uses some credit for cashflow and is always repaid within 2 months, the interest is no issue as the profit she makes is 20% in a month.

I think you over estimate what a typical Thai making say 10K to 30K baht per month can get in total line of credit per card.  Now if they end up getting cards from numerous banks (i.e., a card collector), then yes, they can get themselves into a real pickle when it comes to getting into some big debt.

 

Also, regarding the monthly repayment amount it's repeated over and over at 10% at below website that compares Thai credit cards, minimum monthly income requirements, etc.  And it seems the going interest rate is 18%

 

https://www.moneyguru.co.th/credit-card/

 

[ChaiyaTH]

5 minutes ago, Don Mega said:

Which banks in Thailand give "millions"  as a credit limit on a 20k salary ?

Almost any bank, if used properly and your reputation is good. Your reputation also gets better if you had small loans in the past and paid them back in time. 
My wife got offered from KTB alone over 500K baht and her salary on paper at the time was only 22K. Not even talking about options for mortgage etc too. 

If you would add it all together, easily 3-5M baht credit lines available.
In case of the OP, talking about 35K up salary, it will be even much more and easier. Yet it all depends in credit history and reputation too.

Compared to EU, Netherlands, you have to earn much much more to get even close to 100K baht in credit lines.

Edited February 2, 2020 by ChaiyaTH