Published on May 13, 2005

But borrowers face risks and high fees

The total outstanding balance for cash advances from credit cards in the first quarter rocketed 48 per cent from the same period last year to Bt36.3 billion, according to the Bank of Thailand.

Credit-card holders who take out cash advances face greater risks and extra expenses from the high fees associated with the service. Card issuers allow withdrawals up to Bt30,000 but collect Bt200 per cash advance.

Total cash advances by bankcard holders increased 65 per cent to Bt26.8 billion in the first three months of the year from the same period in 2004.

The aggregate outstanding cash-advance balance for holders of non-bank credit cards increased 18 per cent to Bt8.1 billion, but the total for those with foreign bank-cards edged up just 0.2 per cent to Bt1.4 billion.

The increase in cash advances contrasts with credit card spending, which grew 17 per cent year-on-year to Bt122.2 billion in the first quarter.

Domestic spending by holders of credit cards issued by non-banks grew 18.5 per cent year-on-year to Bt35.9 billion, while holders of cards issued by foreign banks increased their spending in the Kingdom by 18 per cent to Bt14.8 billion.

Holders of credit cards issued by local institutions – banks and finance companies – increased their domestic spending by a marginal 0.7 per cent year-on-year to Bt50.3 billion.

Customers of local financial institutions in the first quarter of 2005 spent Bt1.9 billion abroad, 15 per cent more than in the same period last year.

Spending overseas by holders of cards issued by foreign banks in Thailand rose 14 per cent to Bt917 million. Spending overseas by customers of non-bank institutions rose by 7 per cent to Bt2.3 billion.

The number of credit cards issued in Thailand during the first three months of the year was up 20 per cent from the corresponding period last year to 8.9 million, but this figure was less than the last quarter in 2004.

Outstanding balances on credit cards issued by non-financial institutions jumped 29 per cent year-on-year to Bt51.1 billion, 17 per to Bt44.5 billion for local financial institutions’ cardholders, and 16 per cent to Bt23 billion for customers of foreign financial institutions.

Anoma Srisukkasem

The Nation

Post your comment to this story here