Tighten rules for credit cards, NUBE urges banks

He told Bernama that the present lax rules and the "easy one-hour" personal loan approval methods are tempting young workers to get into debt.

According to the Malaysian Department of Insolvency, about 25,000 people below 35 years were declared bankrupts over a five-year period from 2010, with the majority due to credit card and personal loan debts.

Solomon added that in 2014 the debt-service ratio of households in Malaysia was 43.5 per cent, which meant that almost half the household monthly income went into loan repayments.

"If this trend were to persist the country's future generation would be greatly affected and so would the economy," he said.

A bankrupt person faces many restrictions, like being unable to hold a bank account, run a business or leave the country without the prior permission of the Insolvency Department, and also cannot hold any directorship in a company or stand for political office.

Solomon revealed that some 7,000 NUBE members, or about 17.12 per cent, are going through hard times due to credit card debts.

Many young people are resorting to acquiring new credit cards to settle debts accumulated from old cards, he said.

"This dig and cover technique was promoted by some banks which issued credit cards without proper checks," he said, urging the government to assist in the education of the young in money management.

He also called on NUBE members not to opt for the reduction in EPF contributions, saying it would affect their retirement fund.