Easy credit leads to financial strain on young Malaysian adults

PETALING JAYA - A live-in-the-moment mentality, paired with the convenience of easy credit and buy-now-pay-later schemes, is one of the factors fuelling a rise in debt among young people under 30, say financial experts.

Their comments follow the release of the latest report from Malaysia's Credit Counselling and Debt Management Agency, which revealed that 53,000 young people are buried under RM1.9 billion (S$573 million) of debt.

The report also revealed that 28 per cent of the nation's working adults have turned to borrowing for essential purchases.

One financial planner, Ms Amy Seok, said student loans account for about 60 per cent of debt for people under 30, with credit card debt and personal loans also making significant contributions.

Other factors spurring debt are the allure of making quick returns through cryptocurrency, said another expert, Mr Felix Neoh.

He added that the "you only live once", or Yolo, mentality is driving the purchase of trendy and luxury items among Malaysians aged 30 and below.

The fear of missing out (Fomo) is also a common reason why young adults make financial mistakes, said Mr Neoh, who is the director of Finwealth Management.