Slower growth in plastic spending
Credit-card spending and the number of cards in circulation are both likely to see slower growth this year, as consumers grow more concerned about their future income due to the economic slow-down, according to a study by the University of the Thai Chamber of Commerce (UTCC).
Thanawat Phonwichai, director of the university's Economic and Business Forecasting Centre, said yesterday the expected declining growth in credit-card spending implied that domestic consumers do not want to create more debt during the country's downward economic trend.The number of credit cards is estimated to grow 9.96 per cent to 12.13 million cards this year, compared to 10.2 per cent last year and 14.14 per cent in 2005. Spending on credit cards is forecast to grow 12.6 per cent to Bt851 billion this year, compared to 18.9 per cent last year. However, this was not a negative sign since consumers are more aware of their spending. Credit-card operators will see decreasing non-performing loans (NPLs), Thanawat said. According to a recent report by the Bank of Thailand, the proportion of NPLs to total lending fell to 4 per cent last year. Thanawat said a rate below 5 per cent indicated a healthy banking system. About 0.4 per cent of cardholders are expected to have NPLs. Consumers who earn less than Bt10,000 are concerned about being less able to service credit-card debt. The UTCC's survey showed that 98 per cent of consumers have decreased the number of cards they hold from more than four to just one or two this year, whereas 5 per cent of respondents used to have more than four. This year, the average consumer will spend Bt70,187 per card, while the figure was Bt67,751 last year. Petchanet Pratruangkrai The Nation
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