Thailand's Credit Card Industry Faces Toughest Test in 20 Years

[snoop1130]

File photo for reference only

 

Thailand's credit card sector is staring down its most significant challenge in two decades, with a stagnant economy and tightening regulations threatening growth. Atis Ruchirawat of the Thai Bankers' Association warns of pending obstacles, with projections of sluggish economic performance into next year impacting consumer lending.

 

To cushion the sector, the Bank of Thailand has announced two reductions in interest rates for 2025. However, these measures, while aimed to aid borrowers, are expected to shrink industry profits. Further complicating matters, a new mandatory minimum payment increase from 5% to 8% could strain debtors' ability to keep up, potentially elevating non-performing loans (NPLs).

 

 

Despite these headwinds, Krungsri Consumer Group, a key player, forecasts a robust credit card and personal loan growth, aiming for a 6% to 9% rise in card spending. However, tighter asset quality controls may dampen loan approvals. The company is optimistic, projecting Thailand's GDP growth to reach 3% by 2025, and plans to issue 600,000 new credit cards in 2024. While challenges persist, Krungsri remains committed to expansion while maintaining stable NPL levels, which currently stand below industry averages.

 

-- 2024-12-20

 

 

[OneMoreFarang]

It seems to me too many people have huge credit card debt with huge interest rates.

Restricting credit card companies is good, not bad.

[hotchilli]

12 hours ago, snoop1130 said:

and plans to issue 600,000 new credit cards in 2024

It's Dec 21st today... don't they know the data?

[jcmj]

Maybe they can start offering them to more foreigners that have income. I know some people have them, but sure many more would potentially apply. I’m glad they stopped giving everyone credit cards. Too many people here just run it up like it’s free money and make minimal payments if anything. I don’t blame them for tightening up. 

[john donson]

i remember how hard it was to get one as a farang... 100.000 frozen to get a 90.000 baht credit card... but thai farmer can get it unsecured...

[jippytum]

The new regulations reduced the interest on outstanding  credit card

balances from 32% to  around 16.25%.. still too high. 

However the profit margin reported by the card companies has taken a hit.

Oh dear

Some people are acctually  pleased about that. 

[black tabby12345]

15 hours ago, OneMoreFarang said:

It seems to me too many people have huge credit card debt with huge interest rates.

Restricting credit card companies is good, not bad.

 

As early as 2013, Thai Credit Association pointed out individual debthas come up to dangerous level.

[phil2407]

Never owned a credit card & never will 

My Dad gave me a AMEX Platinum card for emergency if ever needed - that was about 25 years ago - never used it once - if no cash on me or debit card I just don’t purchase!

[TheAppletons]

10 minutes ago, phil2407 said:

Never owned a credit card & never will 

My Dad gave me a AMEX Platinum card for emergency if ever needed - that was about 25 years ago - never used it once - if no cash on me or debit card I just don’t purchase!

 

  Wow, your Dad has paid a lot in annual fees for a card you don't use.

 

  Maybe you should give it back to him.  

[Negita43]

On 12/20/2024 at 12:25 PM, OneMoreFarang said:

It seems to me too many people have huge credit card debt with huge interest rates.

I have quite a lot of debt on my UK cards - all at 0% until 2026. You have to use the credit card companies just as they use you - if they call in the debt it's not a problem - my philosophy better in my bank account than theirs

[bkk6060]

They should be blocking their credit cards until the bills are paid debt is out of control here.

[OneMoreFarang]

1 minute ago, bkk6060 said:

They should be blocking their credit cards until the bills are paid debt is out of control here.

Not just here.

And keeping up with the Joneses, who all maxed out their cards, makes the situation obviously not easier.

When I was a little younger, I also paid huge amounts of interest to the credit card companies. I really don't want to think about how much money I wasted that way. 

[thurien]

On 12/21/2024 at 8:10 AM, jcmj said:

Maybe they can start offering them to more foreigners that have income. I know some people have them, but sure many more would potentially apply

 

no need anymore, a thing of the past ... we use our phones nowadays

[advancebooking]

On 12/21/2024 at 9:21 AM, john donson said:

i remember how hard it was to get one as a farang... 100.000 frozen to get a 90.000 baht credit card... but thai farmer can get it unsecured...

I have a WP salary 150k a month and a 500k limit on UOB/citi visa

[scottiejohn]

29 minutes ago, thurien said:

 

no need anymore, a thing of the past ... we use our phones nowadays

As a credit card?