Credit-card numbers at the end of 2007 are expected to reach 11.8 million. This would represent growth of 8.25 per cent, a slowdown from the 9.46-per-cent expansion in 2006, Kasikorn Research Centre said in a recent report.

Financial institutions have been cautious in approving new credit cards due mainly to the economic slowdown, which is expected to affect the ability of card-holders to service debts.

The slower growth is also a result of the cancellation of credit cards by card-holders after they could not service debts. Card-holders with more than one card have also cancelled some cards as well, the research firm reported.

Credit-card issuers still focus on premium customers, with a minimum monthly income of Bt50,000 per month. However, competition for card expansion among general customers still continues strong. Card issuers have increased distribution channels to include websites, agents and "money expos".

They have expanded their credit-card base to the provinces, although the strongest competition is still in Bangkok.

Kasikorn Research Centre said spending via credit cards in 2007 is expected to reach Bt732.5 billion, an expansion of 15.16 per cent - again a slowdown from growth of 17.13 per cent in 2006 with total spending of Bt636.11 billion, and 20.57 per cent in 2005.

Slower spending in 2007 is expected because of slower growth in the number of credit cards, as banks have become stricter on card approvals for new card-holders.

The economic slowdown has made consumers, particularly in the lower and middle classes, more cautious about their expenses, especially on luxury items.

The central bank's measure of a minimum monthly payment of 10 per cent of total debts to be implemented on April 1 has also made card issuers more cautious about their customers' ability to service debts.

The announcement to increase the maximum credit-card loan rate from 18 per cent to 20 per cent on December 1 has also discouraged card spending.

In addition, political factors, particularly the New Years Eve bomb blasts in Bangkok, have shaken customer confidence. The number of shoppers in malls declined shortly after the incident.

Outstanding credit-card loans at the end of 2007 are expected to stand at Bt199.45 billion, a growth of 16.63 per cent but a slowdown from 19.21 per cent in 2006.

Lower outstanding loan growth is expected due to the higher minimum monthly instalment level from 5 per cent to 10 per cent of total loans.

In addition, some financial institutions have offered card-holders the chance to refinance their card loans with personal loans.

Kasikorn Research Centre also predicted that cash advances from credit cards in 2007 should be Bt215.35 billion, a growth of 16.92 per cent, and a slowdown from 19.54 per cent in 2006.

This is in line with the slowdown in spending expected this year, the research firm said.