KUALA LUMPUR — Malaysian Insolvency Department (MD) director-general Datuk M Bakri Abd Majid has called for restrictions on credit card ownership for fresh graduates entering the workforce as many of them lack financial stability and struggle to control their spending.
He made this suggestion in an interview with Berita Harian on its podcast show, Borak Harini, saying this would address widespread credit card debt among young adults.
M Bakri said fresh graduates starting work had “no real need” for credit cards, specifically if their intention was to use them to “sustain lifestyles they could not afford”.
“There are those earning RM2,000 a month who already own a credit card. What is the necessity for fresh graduates to have one?” M Bakri was quoted as saying by New Straits Times in the podcast.
He said people now used credit cards and took personal loans “to sustain their lifestyle”, citing expenditures such as travel and to “dress up for OOTD (outfit of the day).”
“They want to go to Korea… to Japan. Traveling should only be done when we have extra money, not by borrowing or using someone else’s money,” M Bakri said.
“A credit card is meant for convenience, not for flaunting a luxurious lifestyle,” he added.
His remarks in the podcast echo concerns previously stated about youth in debt.
In a 2023 analysis by the Consumer Credit Oversight Board (CCOB) Task Force, it was found that the country had 3.7 million people who held Buy Now, Pay Later (BNPL) accounts, and that the majority of them were young and working adults aged 21 to 45 years old.
The CCOB Task Force is jointly led by the Finance Ministry, Bank Negara Malaysia and the Securities Commission.
Khazanah Research Institute, meanwhile, in an August 2024 report on BNPL transactions, said Malaysians had spent a whopping RM6.2 billion (US$1.38 billion) using such payment methods in 2023, and that nearly half of these shoppers were under the age of 30.
Last year, the Credit Counselling and Management Agency (AKPK) in a report said it found 53,000 youths aged 30 and below who are collectively in debt amounting to nearly RM1.9 billion.
According to AKPK, the types of spending that led to debt included having additional children, maintaining a particular lifestyle, housing loans, and vehicle purchases.
AKPK also said that 65% of those who sought counselling from the agency were young adults aged between 28 and 30.
M Bakri in Berita Harlan’s podcast said MDI’s observation of young adult trends in lifestyle spending showed that this was a major reason why many of them had financial woes.
He cited the example of buying a RM80,000 car when their incomes could only support a RM40,000 car.
“Is it just to appear wealthy?” he asked.
He said the government and higher learning institutions should hold financial literacy programmes targeting graduates about to enter the workforce so that they can better manage their finances. – March 8, 2025