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Journeying Forward: Stories of Rebuilding and Recovery - Overspending on Lifestyle

Individuals fall into  a debt problem for a variety of reasons – excessive lifestyle expenditure, failed business, gambling or mismanagement of their money. Today, we share the story of Mabel, a 29-year-old Sales Executive.  She earned an annual income of about $60,000, which made her eligible for credit cards. She has a passion for the finer things in life, leading her to accumulate a debt of $80,000 from her indulgence in luxury handbags, high-end skincare products and services, and more.

We’ll delve into her story and how she navigated out of her financial setback.

Mabel was initially tight-lipped about her debt situation. However, she finally mustered the courage to open up,

“I bought several luxury handbags that cost between $8,000 to $15,000 each. I also spent on high end skincare, facial beauty products, you know. I remember I would spend $3,000 in one bill so I can get free gifts.”

When she did well in her job and received a pay increase, she applied for a higher credit limit. With more credit, Mabel shared that she would go on regular holidays and even bought herself a car.

 With the increasing convenience afforded by e-payment platforms, online shopping and the ability to “buy first and pay later” using credit cards,  It is not surprising that one can easily overspend and buy things that we find we don’t really need.

The “alternative” to credit cards, Buy-Now Pay-Later (BNPL) schemes, have also presented consumers with yet another means to access credit. BNPL schemes have become popular especially among younger consumers and cover many products such as clothes and fashion accessories. BNPL transactions amounted to around $440 million in 2021, according to Minister of State for Trade and Industry Alvin Tan in a parliamentary session on 5 Apr 2022.


Following these concerns, a code of conduct outlining best practices for BNPL providers was introduced and took effect on 1 Nov 2022.

Check out CCS Munch and Learn video about BNPL on Facebook.

Mabel shared, “You know lah, it’s so convenient to buy things I like and no need to pay cash immediately.”

Unfortunately, problems arise when making even the minimum required payment becomes a struggle. The wake-up call occurs when we start to miss payments and receive collection calls from our banks, demanding for payments when we don't have enough money to pay.

Mabel shared, “I struggled to cope with many credit cards, each with different payment due dates. I had to bear with high interest rates and late charges. I found it very hard to keep up with the minimum payments. The banks started calling me often to chase for payments. This affected my work and my mood.”

Banks in Singapore have a debt refinancing programme for consolidating unsecured credit facilities across different banks with one financial institution for easier tracking and repayment. This programme is known as the Debt Consolidation Plan (DCP) and is currently being offered by 14 banks and financial institutions.

“I applied for Debt Consolidation Plan, but my applications were rejected by the banks. I was desperately searching for a solution online when a Facebook user recommended me to try CCS. Initially, I resisted the thought of attending the information talk in person. But, I had no choice and had to do so as I really could not cope.”

Mabel’s situation being to improve after she attended a Debt Management Information Talk, conducted weekly by CCS.  

“(After the talk), I attended a one-to-one session with a Credit Counsellor, who worked with me to do a budget and a Debt Management Program (DMP).”

Fortunately for Mabel, she had sufficient payment capacity to work out a repayment arrangement. She committed to adjusting her lifestyle spending and adhering to her budget.

 “Everything was fine after DMP was set up. This is because the bulk of my payment go towards paying down the principal, and the interest rate charged under DMP is also much lower compared to original contracted credit card interest rate. I can see my debt size reducing each month and becoming debt free soon.”

Her outlook on her financial situation also began to improve and she even started making to secure her financial future.

“After I complete my DMP, I look forward to saving up for a fixed deposit and buy an endowment insurance.”

We at CCS are heartened whenever we see people bounce back from financial setbacks. We find meaning in journeying with our clients through the ups and down of their debt repayment journey.

We asked Mabel to share a few words of encouragement.

“Many people are not aware of CCS. So was I.

But they should approach CCS and try to work out a DMP, which can help us repay unsecured debts in a systematic way. (Don’t) borrow from licensed moneylenders or loan sharks to try to have a quick fix. Once on a DMP, persevere and keep up with your payments.”

Credit Counselling Singapore

Published 25 August 2023.