4 Ways You Are Accumulating Debt Without Knowing It

Kendra Tan

Kendra Tan

Last updated 08 September, 2022

Find out all the ways you are unconsciously racking up debt and how to pay them off.

Student loans, mortgages and business loans — Everyone has fallen into debt at some point in their lives. 

While the aforementioned debts are pretty obvious, there are some debts you may have incurred which are quietly eating away at your bank balance without you realising it. 

Here are four ways you are racking up debt without knowing it, and the strategies that you can use to quickly and efficiently manage your debt in Singapore.

1. Making minimum payments on your credit cards

The folks at Singsaver love credit cards. We genuinely do. 

They’re great because they are 1) convenient, 2) more secure than using cash/debit card, and 3) you can earn points or miles at the same time.

Besides that, credit cards are also amazing for building credit so that you can get a better loan in the future for big purchases such as a house — if you pay your bills in full every month, that is. 

However, should you only choose to pay the minimum sum of S$50 a month, you’re on a downward spiral of credit card debt.

Unfortunately, banks aren’t nice enough to give you a free pass — most of them will be charging you a ridiculous interest rate ranging from 25% to 28% per annum, which you shall receive in your next bill. 

Oh, did we also mention that there's a late payment fee if you don’t pay before the due date? 

Late payment fees are one of the worst ways to spend your money, and can easily snowball, especially if you have multiple credit cards.


Pay your credit card bill. In full. Every. Single. Month.

Set a reminder on your phone, or get a close friend to remind you if you really have to. Credit card debt sucks, and you'll want to make sure you NEVER fall into it.

2. Paying for items via instalments

Buy Now Pay Later (BNPL) services such as Atome and Hoolah which divide expensive purchases into several, interest-free payments are great — but they’re only suitable for people who are chasing miles and don’t want to bust their 4mpd cap on their credit card. 

For folks who think of BNPL services as a sort of interest-free “money lending” service, you’ve gotten the wrong idea. 

Should you miss a payment, dire consequences await. 

In the case of Atome, an admin fee of S$15 will be charged a day after the payment is due and your account will be temporarily frozen until the outstanding payment and admin fee have been cleared — which is worse than not even paying back in the first place. 


You will just have to control yourself and your spending.

One tip I personally follow is that, if you can’t afford to pay it in full, don’t buy it. 

If you’re someone who's looking to use BNPL services so that you don’t overshot your 4mpd cap, set a reminder on your phone’s calendar to pay back the instalments each month. 

3. Paying for subscriptions that you aren’t even using 

“When you’re broke, you realise even the smallest luxuries cost you a pretty penny. Some of the very common money sinkers are subscription services such as Spotify and Netflix. It’s important to go through your credit card statements to see what you’re actually paying for, and if you’re even still using the service. If not, cancel them.” — Nat Ho


Keep tabs on what you’ve subscribed to, and don’t forget about those memberships you signed up for free and forgot to cancel. Examples would be, BlueSG’s free one-month trial, Amazon Prime and food delivery premium subscriptions

There are tonnes of free online entertainment nowadays, and you don’t necessarily need to pay a premium to enjoy your favourite movies. You can stream them illegally, or borrow an account from your friend. 

4. Not maintaining the minimum balance in your bank account 

Banks and their fees are sneaky — if you fall below a certain amount of money in your savings account each month, they deduct a couple of dollars from it. 

And because it’s only a couple of dollars, you’d probably won’t want to make a fuss by calling the bank up. However, in the worst-case scenario, you will be left with negative dollars in your account when there’s no more to deduct from. Imagine how much fees you would rake up if you have multiple accounts with S$0 inside them! 


Consolidate every savings account you have and take note of each bank’s minimum sum and fall-below fee. Make sure to diligently keep at least the minimum in your bank account. If it’s hard for you, just stick to one high-interest savings account and close the rest. 

What happens when I’m in debt? 

If you’re struggling to keep up with your monthly repayments in full, you’re officially in debt.

What happens now is that you’ll have to recover from it by coming up with a debt-reduction strategy.

If you have outstanding loans of various types, you can consider these options:

  1. Personal Loan
  2. Debt Consolidation Plan

Personal loan

In comparison to credit cards, personal loans often offer a much lower interest rate. This is a good thing because the lower the interest on your debt, the less you have to pay overall.

Personal loans are also straightforward and flexible. You can choose the amount and duration of the loan that best fits your budget.

You can use an unsecured personal loan to consolidate credit cards or other types of debt. The loan may give you a lower interest rate on your debt and a fixed repayment period (12 to 84 months) to clear off your debt.


  • Fixed interest rate and monthly payment
  • Fixed payment period
  • Customers with excellent credit, higher incomes or loan amounts enjoy lowest rates


  • May carry a processing fee

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Singsaver Exclusive Offer: Receive the following rewards when you apply for an SCB CashOne Personal Loan:

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Plus, enjoy up to S$4,100 cashback when you apply for a min. loan of S$12,000 with a tenure of 3 to 5 years. Valid till 31 May 2024. T&Cs apply.

Debt Consolidation Plan

There’s another financial tool you can use to reduce your interest charges, and this will be especially useful to those who are heavily indebted.

Consider applying for a Debt Consolidation Plan (DCP) if you are struggling to keep up with your debt repayments. 

A DCP involves the transfer of all your debts to one singular financial institute, which will pay off all your outstanding unsecured financial obligations on your behalf. Then, you will enter a repayment agreement with this financial institute to repay your total debt, but at much lower interest rates than before. 

In most cases, a DCP is a last-ditch effort to get things under control, and as such, you will have to accept restrictions on your financial freedoms while you’re under the programme. However, these restrictions are lifted as you achieve certain milestones in your debt repayment journey.


  • Fixed interest rate and monthly payment
  • Fixed payment period
  • Long repayment period of up to 10 years


  • Other loan facilities are closed or suspended until you clear this loan

Avid promo code hunter and haggler. Kendra doesn’t like paying full price for anything. She’s the best person to bring along if you’re travelling on a budget. Have an interesting story to tell? E-mail her at kendra.tan@singsaver.com.sg


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

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