City of debt – high credit card interest rates blamed

Credit card interest rates of up to 40 percent in Hong Kong are forcing people to borrow more and more. This had been mentioned in a survey published yesterday.

About 37 percent of those surveyed found it too hard to repay their credit card bills with 63 percent, blaming high interest rates.

A Hong Kong University public opinion poll consisting of 501 people indicated that around 60 percent of respondents had overspent without noticing.

"High interest rates push people more heavily into debt. If they do not settle their debt in full, every new purchase will start being calculated with interest. In Hong Kong almost all banks charge high interest rates compared with other countries," according to Joyce Mok Yuen-yu of PrimeCredit which commissioned the poll from May 26 to June 2.

A 36 percent average interest rate on credit cards means that the interest for the rollover balance in the next year is expected to reach HK$7 billion.

About half the respondents chose partial repayments and 30 percent only agreed to the minimum payment - saying they wanted to keep more cash in hand or because of cash-flow problems. About half said they felt controlled by card debts ,while 20 percent were unhappy about payment reminder calls and had problems concentrating on work.