Consumers avoid using credit cards due to slowing economy

[webfact]

Consumers avoid using credit cards due to slowing economy

By THE NATION

 

 

The Thailand economy's slowing growth has impacted the credit card spending of Bangkok Bank cardholders.

 

The bank’s credit card spending in the first half of this year grew by only 6-7 per cent compared to 10 per cent for the same period of last year, according to Shoke Na Ranong, the executive vice president and manager of the credit card division of Bangkok Bank.

 

The card spending might improve in the second half of the year if the economy improves, he said, perhaps by as much as 10 per cent.

 

However, even if the second-half card spending expands against the slowing spending from the first half, it could result in full-year growth of between only 8 per cent and 9 per cent, falling short of this year’s target of 12 per cent growth.

 

Shoke added that economic slowdown is causing the growth rate of credit card spending to be unsteady. Consumers have been more careful of their spending since the beginning of the year, resulting in low first-half growth at 6-7 per cent. The bank is monitoring consumer confidence to see if it rebounds after the new government’s installation.

 

He said that the bank’s issuance of new credit cards this year was expected to be 200,000 cards, compared to 350,000 card in the previous year.

 

Source: https://www.nationthailand.com/business/30373482

 

-- © Copyright The Nation Thailand 2019-07-24

Follow Thaivisa on LINE for breaking Thailand news and visa info

[RotBenz8888]

19 minutes ago, webfact said:

The card spending might improve in the second half of the year if the economy improves, he said, perhaps by as much as 10 per cent.

Or it might perhaps get worse?

[FarFlungFalang]

5 minutes ago, RotBenz8888 said:

Or it might perhaps get worse?

Perhaps by as much as 10 percent.

[Cadbury]

40 minutes ago, webfact said:

Consumers avoid using credit cards due to slowing economy

 

This is only negative news for the Bangkok Bank so who cares? But it might be positive news for the growing household debt problem. 

[overherebc]

23 minutes ago, FarFlungFalang said:

Perhaps by as much as 10 percent.

Difficult to give this thread much credit.

[RotBenz8888]

9 minutes ago, overherebc said:

Difficult to give this thread much credit.

It's slow, but it might improve in the second half of the day.

[overherebc]

10 minutes ago, RotBenz8888 said:

It's slow, but it might improve in the second half of the day.

Even that will depend on whether interest will go up, go down or remain the same.

[RotBenz8888]

11 minutes ago, overherebc said:

Even that will depend on whether interest will go up, go down or remain the same.

We'll just have to continue monitoring the poster confidence and see if it rebounds.

[jonclark]

Maybe spending slowed as all the cards are maxed out and now feed into high household debt. Hence reduced consumer spending

[lipflipper]

I am simply amazed at the numbers of times I have seen Thai people pull out a crdit card to pay for small purchases. I am talking about less than 500 Baht. It's no wonder then that household debt is on the rise and will for the near future. I also think that when it comes time to pay the monthly bill they only pay the minimum payment as their budget simply will not allow them to pay more. Unless you are considered well off in Thailand for the vast majority of people they are struggling to keep their heads above water.

Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app

[overherebc]

1 hour ago, RotBenz8888 said:

We'll just have to continue monitoring the poster confidence and see if it rebounds.

As the man with the wooden leg said

It's a matter of apinion

[Eligius]

'Economy slowing'. Fake news. The economy is BOOMING like never before. The new 'democratic' government has told us so!

 

[FarFlungFalang]

16 minutes ago, lipflipper said:

Unless you are considered well off in Thailand for the vast majority of people they are struggling to keep their heads above water.

I dunno,but it maybe a poor choice of words considering the drought situation.

[FarFlungFalang]

4 minutes ago, Eligius said:

Fake news. The economy is BOOMING like never before. The new 'democratic' government has told us so!

 

No that's just the drums and bass from music far away that you hear.

[DrTuner]

Hard to use it when you're maxed out, eh?

[overherebc]

8 minutes ago, DrTuner said:

Hard to use it when you're maxed out, eh?

No need to bring 'that' into it.

Try to keep the thread clean.

[wwest5829]

Why do Thai banks refer to "credit cards"? After 8 years here, all I have seen is secured or debit cards. No credit is being extended by the banks. To get a Thai "credit card" I have to put the credit limit into the bank account up front ... no credit is therefore extended. In a related matter, I have continued to use my US Credit Cards and pay the balances each month. However, this will be curtailed. If I pay for hotel rooms, restaurants, flights with my US Credit Cards Thai Immigration cannot handle recognizing this money is spent in Thailand and is part of my monthly income support. Result? I will curtail use of Credit Card spending in Thailand.

[DrTuner]

18 minutes ago, wwest5829 said:

Why do Thai banks refer to "credit cards"? After 8 years here, all I have seen is secured or debit cards. No credit is being extended by the banks. 

Thais are able to get them, especially Central is pushing them all the time. Aliens too if they can show they paid taxes.

[overherebc]

8 minutes ago, DrTuner said:

Thais are able to get them, especially Central is pushing them all the time. Aliens too if they can show they paid taxes.

Not too difficult. I have both direct debit and a credit card and I'm retired.

[Deli]

As long as they can afford denying CC's for expats, they must still do well.

[userabcd]

44 minutes ago, wwest5829 said:

Why do Thai banks refer to "credit cards"? After 8 years here, all I have seen is secured or debit cards. No credit is being extended by the banks. To get a Thai "credit card" I have to put the credit limit into the bank account up front ... no credit is therefore extended. In a related matter, I have continued to use my US Credit Cards and pay the balances each month. However, this will be curtailed. If I pay for hotel rooms, restaurants, flights with my US Credit Cards Thai Immigration cannot handle recognizing this money is spent in Thailand and is part of my monthly income support. Result? I will curtail use of Credit Card spending in Thailand.

Secured Credit card is a credit card. When one uses a credit card there is no change to the balance of the security funds on deposit and it accrues some interest. Banks have just implemented a security deposit to minimise risk.

 

Frankly I am grateful this kind of secured credit card is available as it is nigh on impossible to rent a car in a foreign country without a credit card.

[DrTuner]

14 minutes ago, userabcd said:

Frankly I am grateful this kind of secured credit card is available as it is nigh on impossible to rent a car in a foreign country without a credit card.

I've used Hertz with a debit card without a problem for a few years now. I haven't had nor needed a credit card since.. I think 2012. All hotels, etc have been happy enough with the debit visa/mastercards. They simply make a deposit reservation that shows in the bank balance and credit it back later.

[Cake Monster]

Cards already maxed out.

Now have to borrow from Auntie Noi, who is saying - NO !

[Lodestone]

5 hours ago, lipflipper said:

I am simply amazed at the numbers of times I have seen Thai people pull out a crdit card to pay for small purchases. I am talking about less than 500 Baht.

It doesn't amaze me. I use a credit card for everything I can from grocery shopping to fast food meals, to even a cup of coffee -- any place that'll take them. It's way more convenient for me than dealing with cash, which I can save for things where they only take cash like taxis, etc.

[Monomial]

7 hours ago, lipflipper said:

I am simply amazed at the numbers of times I have seen Thai people pull out a crdit card to pay for small purchases. I am talking about less than 500 Baht. It's no wonder then that household debt is on the rise and will for the near future. I also think that when it comes time to pay the monthly bill they only pay the minimum payment as their budget simply will not allow them to pay more. Unless you are considered well off in Thailand for the vast majority of people they are struggling to keep their heads above water.

Sent from my CMR-AL19 using Thailand Forum - Thaivisa mobile app
 

 

That is usually because the get points or cash back from using the card, so they try and use it everywhere. It is a consequence of successful marketing by the banks. Says nothing about the fact they can't afford the purchase. I know many Thais, my wife included, who use their credit card every chance they get, and they always pay the bill in full at the end of the month.

 

I don't think Thais are any more inclined to pay only the minimum on their credit cards than those in Western countries. And I know for a fact that many people in the US use their credit card to pay for lunch at McDonalds. Nobody uses cash there. Doesn't mean they can't afford $7 for lunch.

[BuckBee]

yep most of them blacklisted from credit.

they neck deep in debt from all encouragement buying new bikes, new ipads and new pickups .

The working class sector that can realistically afford it is quite small .

[Isaan sailor]

Bank of Thailand to blame.  Too intoxicated with hot money inflows from foreign sources—to care about the Thai economy. Tourism and exports all dying from an overpriced Baht.

[DrTuner]

8 hours ago, lipflipper said:

I am simply amazed at the numbers of times I have seen Thai people pull out a crdit card to pay for small purchases. 

How do you know it's a credit card? The debit cards also come from Visa/Mastercard and you have to look quite closely to see the "debit" printed on the cards.

 

I think quite a few here don't know the difference between a debit card and a credit card. In short, debit card is backed by your bank account balance, credit card is backed by a loan given by the bank to you.

[new2here]

I think what’s more concerning is not the net value of the credit card spending per se - rather what is actually being bought. By that I mean it’s troublesome if the so-called “essentials” like housing (rent, basic food, etc) are being bought on credit (and carried month to month with interest accruing) as opposed to true discretionary spending.

It’s one thing to have expanding credit card spending as means of economic growth but I think it’s something else if that “spend” is essentials that traditionally were paid by cash or cash equivalents.

I’m of mixed opinion as to the idea that the BoT (as a government regulator) has imposed maximum lending caps (ie credit limits) on private licensed lenders (ie the banks).... I see a larger national economic incentive to insure that rampant household bankruptcies don’t occur... but on the other hand, I’m not so sure that it’s the governments place to dictate the maximum a private lender (bank) will or won’t lend to a private citizen. I tend to think that should be dictated competitively by each lender.


Sent from my iPhone using Thaivisa Connect