Credit card debt

[Don Mega]

3 minutes ago, ChaiyaTH said:

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.

 

500k credit limit on a card is hardly the millions you talk about and from memory when I applied for my credit cards I had to list all/any debt I had, including other credit cards and there credit limits...... Is this not a requirement for Thai's also ?

 

A credit limit of 22 times the salary is very generous though, I only got 10 times but I guess that's limited to foreigners due to the risk of them skipping the country.

 

[Farangwithaplan]

1 hour ago, HashBrownHarry said:

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

That's just a tick under 28% PA interest. And just over 5 years to pay out in full. You can assist her in preparing to either negotiate with the bank on a new - low rate no frills credit card, a personal loan or similar. Banks and all financial institutions have leeway and will negotiate if it is approached the correct way.

 

Even getting it to 15% PA will have it paid off in just over 3.5 years. 10% will get her paid out in 3.25 years. That is possibly realistic.

 

The important thing if you decide to assist her in a non financial way is to have her put all her cards on the table. You must know about all debts. Then create a new budget. Set up direct deposits from her salary directly from her employer to the credit card account and rent etc if possible.

 

 

1 hour ago, HashBrownHarry said:

( she makes 35-40K pm )

See if she can trim outgoings even another 1000 baht per month. Plenty of ways to do that.

 

 

58 minutes ago, NCC1701A said:

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. 

Sage advice. Emotional and and financial education will be a gift for life if she chooses to accept it. Everyone makes mistakes. If you care about her, give her the opportunity and support to have her get back in the black. If she fails to keep her end of the bargain, you can't do much else.

 

[BobbyL]

1 hour 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. 

I think you're right. Our Citibank credit card has been used a lot recently for booking our summer holiday to America and a few other things. We have spent about 130,000 on it and our minimum repayment for February was exactly 10% of the total amount. 

[SteveK]

3 minutes ago, BobbyL said:

I think you're right. Our Citibank credit card has been used a lot recently for booking our summer holiday to America and a few other things. We have spent about 130,000 on it and our minimum repayment for February was exactly 10% of the total amount. 

In the UK the minimum payment is 1%. They want to keep the debt rolling for as long as they can.

[RJRS1301]

Nearly 50% of income to pay interest (mainly) on a debt, not good miney management at all.

Perhaps see if she can get the interesst halted or decreased to address the principle debt.

 I bet there is very little left to show for the debt accrued.

I hope she has cut the card up and not got a replacemtn one.

 

[oxforddon]

If the card was bank issued, and in reply to a comment about a debt collection agency, my understanding is that it is illegal for a bank to sell debt to a debt collection agency. I had this once and after I quoted that legal opinion, I never heard again from the debt collector. I settled it all eventually direct with bank who were embarrassed that they had broken that law and gave me favourable repayment terms.

[BritManToo]

43 minutes ago, Don Mega said:

when I applied for my credit cards I had to list all/any debt I had, including other credit cards and there credit limits.

Asked you to list, isn't the same as having to list.

They don't check, even in the west.

 

In the UK I always used to say NONE, even though I had MANY.

I even got one credit card by claiming I owned the house, when I was on holiday, renting the house for a week.

Edited February 2, 2020 by BritManToo

[Don Mega]

4 minutes ago, BritManToo said:

Asked you to list, isn't the same as having to list.

They don't check, even in the west.

 

 

Ahhh ok, I never knew they don't check.

 

[Pib]

18 minutes ago, oxforddon said:

If the card was bank issued, and in reply to a comment about a debt collection agency, my understanding is that it is illegal for a bank to sell debt to a debt collection agency. I had this once and after I quoted that legal opinion, I never heard again from the debt collector. I settled it all eventually direct with bank who were embarrassed that they had broken that law and gave me favourable repayment terms.

 

Here's a summary of the revised debit collect law that went into effect in Sep 2015.

Quote

 

Debt collection has long been associated with deceptive and unscrupulous practices. In Thailand, it is not uncommon to hear stories of collectors tricking debtors into paying by giving false information or even resorting to abusive language, violence and blackmail.

In an effort to stamp out these practices, the National Legislative Assembly has passed the Debt Collection Act. The new law, which will take effect on Sept 2, seeks to establish fair and standardised collection rules. It applies to all debt collectors, from institutional lenders such as banks to individual creditors. Importantly, however, while it applies to individual debtors, debtor companies are not protected by the law.

Under the law, the way creditors collect debts will be more tightly regulated. Debtors will also have increased protection and rights.

The law defines "debt collector" as a creditor who makes a loan to a debtor. The debt can be legal or illegal. In other words, even loan sharks are subject to the Act.

Further, a creditor's authorised representative (such as an attorney), a debt collection agency and its authorised representative are all categorised as "debt collectors". A "debt collection business" means any business hired to collect a debt, directly or indirectly. Lawyers who collect debts for clients are not considered a "debt collection business".

• NLA passes bill to regulate debt collectors
• New debt collection law aims to reel in loan sharks
• Loan shark accused of slaying, torching debt collector

A "debtor" means any natural person obligated to pay a debt. This includes an individual debt guarantor.

Under the law, debt collectors can only communicate with the debtor or another person authorised by the debtor (such as a lawyer). A collector can only contact third parties to acquire information or learn the debtor's location. The collector is also limited to identifying himself and inquiring about the debtor's whereabouts to a third party. The collector cannot tell the third party that the debtor owes a debt unless the third party is a spouse, parent or child of the debtor.

The collector is also required to communicate confidentially with the third party. He cannot use any language, symbol, mark or business name of the debt collector on any correspondence that may indicate the communication is related to debt collection.

The collector can contact the debtor only between 8am and 8pm Monday to Friday and between 8am and 6pm on holidays. The collector can also only contact the debtor at a place indicated by the debtor.

Attorneys for debt collectors must state their names, agency, creditors' names and the debt amount. If the collector seeks to collect the debt in person or demands performance, he must show his power of attorney to the debtor. If the debtor pays the debt, the collector must give the debtor evidence of payment such as a receipt.

When collectors try to collect a debt, they cannot do the following:

Threaten to use violence against the debtor or any action that injures the body, property or reputation of the debtor;

Notify and disclose any debt of the debtor to third parties who are not related to the collection;

Use profane or other language that insults the hearer or reader;

Use false information to deceive a debtor -- for example, by falsely claiming to have a court order or be a state official or lawyer; or by falsely threatening to seize the debtor's assets or salary.

In addition, and much like when contacting third parties, collectors cannot disclose that the nature of their communication is to collect a debt. They cannot contact debtors by postcard, open letter, fax or any other "non-discreet" method that shows the communication is related to collection.

Moreover, even if the communication is discreet, the collector can only indicate the collector's business name -- as long as it does not indicate the business is a debt collector.

The collector cannot collect any fees or expenses over an official limit set by the Committee Governing Debt Collection, appointed under the Act. Also, the collector cannot convince a debtor to pay by cheque if the collector knows the debtor cannot afford the debt.

Failure to comply with the law is a criminal offence. Anyone who is aware of a violation can report it to a district office or police station. A collector who threatens or causes injury to a debtor's person, property or reputation can be fined up to 500,000 baht and/or jailed for up to five years.

Individual directors, managers and representatives of corporate debt collectors can also be criminally liable. If a juristic person violates the law, and the offence falls within the scope of duty of the director, manager or representative, these individuals can be punished for the same offence as that committed by that juristic person.

While the best way for debtors to minimise the risk of dealing with unscrupulous collectors is to borrow from reputable lenders, the Debt Collection Act provides a measure of protection for those who do not have this option. Prudent lenders should understand the law.

---

This article was prepared by Alongkorn Tongmee, attorney-at-law, and Koranathip Samransamruadkit in Tilleke & Gibbins' dispute resolution department. 

 

 

[tomazbodner]

2 hours 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!

Can't be. AFAIK minimum payment is 10% on credit card debt and has 18% or 20% (not sure what is old and what is new rule) interest plus credit usage fee.

As such she would have to pay 56,000 baht per month if she really had credit card debt of 560k as she claims.

 

This sounds like some other type of loan, like a condo loan or personal loan (AEON and Citi offer these - and at least AEON actually has a card). Some of these are long term loans with lower interest than credit cards. But 13:4 ratio would require loan to be a decade+ to interest to be that high?

 

I'm most certain this is not a credit card loan. Personal loan or a housing loan probably.

[TallGuyJohninBKK]

2 hours 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.

 

This is kind of interesting...  As I mentioned in another thread recently, my wife without my knowledge ran up quite a large amount of Thai credit card debt a few years ago -- which I eventually found out about, chewed her out but good, took control of her finances with her consent, and got her to pay it off herself with her salary over more than a year's time of frugal living.

 

So because of that, I have piles of her old credit card statements here at home to look at.

 

--When I look at the mainstream bank card statements, which tended to have APR rates around 18%, they do indeed show a 10% of balance owed amount as the monthly minimum payment.

 

--However, I also am looking at statements for non bank credit card providers like Umay+ and AEON, which tend to have even higher interest rates as high as 28% APR (which shocks me that that's even legal). In those cases, the minimum required monthly payments were both around 3% of the outstanding balance.

 

And, per the OP's post, a 560,000 baht debt with a 3% monthly minimum payment amount would be just about the 17K monthly obligation he was referring to.

 

Edited February 2, 2020 by TallGuyJohninBKK

[thooktong]

Does she have ONLY  one credit card and only one credit to pay back? For her flat/house car her monthly expenses of expensive goods or not her health etc. Advice when the total debt exceeds 30,000 baths it is always better to take a conventional loan from a bank spread over several years if necessary!
So pay off all your credit card credits with a conventional bank loan! Much Cheaper !

Edited February 2, 2020 by thooktong

[Pib]

9 minutes ago, TallGuyJohninBKK said:

--However, I also am looking at statements for non bank credit card providers like Umay+ and AEON, which tend to have even higher interest rates as high as 28% APR (which shocks me that that's even legal). In those cases, the minimum required monthly payments were both around 3% of the outstanding balance.

Yes, AEON who issues credit cards generally has the 10 month repayment requirement like banks; however, but, you can also setup different repayment plans with AEON....longer repayment plans especially for cash advances done on a credit card.   There credit card purchase interest rates is generally 18% but their interest rate for cash advance repayment is 26 to 28%.  Plus when initially getting the cash advance there is a flat 3% fee of amount withdrawn just like Thai banks.   

 

AEON and similar companies seem to focus more on money lending/cash advances under the disguise of a credit card company.   I have several in-laws who got into big debt via card cash advances from AEON cards.

 

Many times a lot of a Thai credit card debt is not from purchases but cash advances....and the much higher interest rate on a cash advance that begins to accumulated immediately (vs later as with a purchase) can really eat a person's lunch.

 

 

  

[TallGuyJohninBKK]

4 minutes ago, Pib said:

Yes, AEON who issues credit cards generally has the 10 month repayment requirement like banks; however, but, you can also setup different repayment plans with AEON....longer repayment plans especially for cash advances done on a credit card.   There credit card purchase interest rates is generally 18% but their interest rate for cash advance repayment is 26 to 28%. 

 

Ya, in my wife's case with both UMay+ and AEON, she wasn't buying things with those cards. She was withdrawing cash to give to a family member. So that's probably why her debts from those cards were carrying 28% APR interest rates.

 

However, AFAIK, neither of those cards in my wife's case had any fixed duration repayment period... AFAIK, she could have gone on and on making the minimum 3% monthly payments and them charging her 28% APR interest for God knows how long...  And in fact, that's what she had been doing prior to me finding out about the debts.

 

 

[BritManToo]

6 hours ago, TallGuyJohninBKK said:

She was withdrawing cash to give to a family member.

Her brother?

[TallGuyJohninBKK]

2 minutes ago, BritManToo said:

Her brother?

 

Just gonna leave you guessing!  

[Kenny202]

9 hours ago, bkk6060 said:

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.

Funny you say that Ive found the same thing. The better the girls position, the more access she has to credit. Theyre all in debt its just the so called hiso ones have bigger debts.

[HashBrownHarry]

9 hours ago, BritManToo said:

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!

I'll make sure i add this question to the interview process for next girlfriend - lol

[mshs]

5 hours ago, HashBrownHarry said:

I'll make sure i add this question to the interview process for next girlfriend - lol

Good.  The prettier they are the less debt they have.  It is the same all over the world.  Where there is a LA9, there is a man not far behind, paying her bills.

The fatties are like the proverbial drunken sailor on shore-leave, spending on hair/nail spas & boutiques and "brand names" in an attempt to disguise their homeliness.

 

 

[HashBrownHarry]

6 hours ago, mshs said:

Good.  The prettier they are the less debt they have.  It is the same all over the world.  Where there is a LA9, there is a man not far behind, paying her bills.

The fatties are like the proverbial drunken sailor on shore-leave, spending on hair/nail spas & boutiques and "brand names" in an attempt to disguise their homeliness.

 

 

This contradicts what 50% of these posts say, which one is it?

 

 

[Fairynuff]

On 2/2/2020 at 11:22 AM, ChaiyaTH said:

her name is bad with banks for life.

Incorrect. Once the debt is paid in full there’s a period of two years where her history remains on file, after that she can get loans, get a credit card again, return to normal.

[hansnl]

On 2/2/2020 at 11:29 AM, Lacessit said:

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.

 

The elite wants this?

Scary and bad debts are not very much in vogue.....

[steven100]

On 2/2/2020 at 10:48 AM, HashBrownHarry said:

- Is it written off?

yes ....  don't worry, the bank will just write it off i'm sure  

[Proper person]

On 2/2/2020 at 4:33 AM, 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. 

 

 

Your figures certainly don't add up. 

 

[GarryP]

3 minutes ago, Proper person said:

Your figures certainly don't add up. 

 

Plus interest. Satisfied? 

[Tchooptip]

On 2/2/2020 at 12:26 PM, eisfeld said:

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.

From most loan sharks I've heard of it was 2% ...per month, that is to say, 24% per year,  and yet thousands of Thais borrow at this rate of madness.

[twix38]

She's just told you!

What else will she just tell you next or not tell you. Rarely do they tell you everything or the full story straight off. I would bet you now know between 50% and 75% of the full situation.

Edited February 3, 2020 by twix38

[legend49]

They often average debts of up to 2 million baht and pay the minimum back and wonder why its still a huge amount owing. They cant manage money, most do not know the conditions of the card or interest rate. But I blame the banks who do poor governance checks on ability to pay.

[RBOP]

Even with my platinum viea card maximum credit is 200K. Is she lying to you?

[wombat]

poor girl, be a love and pay it for her.