Malaysia vs. Singapore: Credit Card Consumer Behaviour

The Asian economic model witnessed a complete turnaround after the 1997-98 Asian financial crisis. Household lending increased sharply leading to a complete cultural shift, in terms of spending, especially among the youth. Banks started to give out credit cards targeting mostly the 21 to 35 year age group to cater to their daily spending needs. Singapore and Malaysia, a part of the economic shift, were among the frontrunners that witnessed a substantial surge in credit card usage.

According to a report published by Visa, there are 3.4 credit cards in every household in Singapore. Malaysia too boasts quite a significant number of people resorting to credit card usage to carry out transactions related to online shopping, dining, groceries, and the likes. According to a report released by Findex, in 2014, 20% of Malaysians reported owning a credit card, which is an 8% increase from the figures recorded in 2011. Though card usage is rampant among these two countries, the consumer behaviour is strikingly different.

Credit Card Consumer Behaviour in Malaysia

According to our survey conducted, most respondents said that they do not own more than 3 cards. However, 1 in 3 respondents between 55 and 64 age bracket said that they own more than 3 cards.

Also, cardholders in Malaysia prefer using credit cards over debit cards. A Findex report states that 84% of credit cardholders used their cards to make payments.

In Malaysia, consumers are quite particular when it comes to choosing credit cards and the banks that offer such. BBazaar’s survey found out that around 35% of respondents own a credit card from CIMB and 23% from Maybank. Malaysians above 45 years of age mostly prefer Citibank credit cards, the survey further reveals.

The choice of card depends mostly on the benefits it offers. Most consumers in Malaysia, especially those between 25 and 34 years of age, usually prefer cashback cards or cards that offer shopping discounts. The survey also reveals that consumers would more likely use a card offering instalments against payments than a card providing miles or other privileges against overseas expenses.

Malaysians generally like to use their credit cards against transport, groceries, and online shopping  expenses respectively. BBazaar’s survey finds that about 24% of Malaysian youth would like to use credit card-based transactions against online shopping. It also reveals that the frequency of card usage solely for entertainment purposes mitigates along with age.

The survey did note that Malaysians don’t prefer paying for their insurance by using their cards.

There is not much gap between Malaysians using more than one credit card and just using the main card (for Malaysians who own more than one card) as a mode of payment. According to BBazaar’s survey, the difference stands at 49% and 51% respectively. About 63% of the Malaysian youth would like to use only the main card when compared to other age groups.

Credit Card Consumer Behaviour in Singapore

BBazaar also conducted a similar survey on Singaporeans. About 50% of the respondents, who own at least one credit card, have either 2 cards or less. While 23% of the respondents reportedly own more than 5 credit cards.

The survey further reveals that DBS/POSB are among the most popular banks among 52% of the respondents who own a credit card. Meanwhile, UOB credit cards are used by Singaporeans under the age bracket of 35 to 54.

The older age group is more likely to hold more than 5 cards, while the youth (18 to 24 years of age) usually own a single credit card. Singaporeans between the age group of 25 and 34 are likely to own 1 to 3 cards. As per BBazaar’s survey, credit card ownership also depends on the monthly household income or MHI. Those having an MHI between S$4,000 to S$8,000 are likely to own 5 credit cards or more, while those earning less than S$4,000 have 1 or 2 credit cards.

Respondents below 45 years of age prefer air miles, while reward points are more important to those falling under 35 to 44 age bracket. Very few Singaporeans under the age of 25 would like to use a card to get petrol discounts as opposed to malaysians who prefer to use it against their transport expenses.

Unlike Malaysians, respondents from Singapore’s card survey said that they would prefer cards offering benefits against overseas transactions compared to cards proving payment instalment facilities. The survey also suggests that Singaporeans prefer to use more than one card compared to Malaysians.

There are certain similarities however, with Singaporean youth, between ages of 18 and 24, prefering to use their card for online shopping expenses.

Malaysia vs Singapore:  Credit Card cosumer behaviour survey

The Verdict

Though both the countries have embraced credit cards with aplomb, Singaporeans are slightly ahead in terms of card usage. Also, Singaporeans like to use multiple credit cards whereas Malaysians usually limit spending to their main credit card.

BBazaar’s survey further finds that about 71% of respondents (Singapore) charge less than S$1,500 to their main credit card every month. However, about 76% of Malaysian respondents charge less than RM3,000 to their main credit card on a monthly basis.

The usage of credit cards is clearly more prominent in Singapore. However, Malaysia is catching up fast with more youth resorting to credit card-based transactions.

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