WITH THE political unrest calming down, the country nominating the prime minister today and the spending season looming, credit-card companies think it is a good time to launch major campaigns.
However, they will focus on the upper-income segment to ensure that the campaigns will not drive up household debt.
In the first half, total credit-card spending grew by 7 per cent year on year, while spending on retail items is unlikely to grow as much as before because of the political uncertainty, which diluted the spending mood. Tearavath Trirutdilokkul, executive vice president of Siam Commercial Bank, said yesterday that SCB had joined forces with 33 fashion and luxury brands in four shopping malls to launch a big campaign with rewards to redeem.
This campaign alone will cost SCB a whopping Bt30 million.
The bank wants to encourage credit-card spending to cash in on the reawakening of consumer confidence, so it decided to use the campaign to attract shoppers.
In the second half, SCB’s credit-card spending is projected to grow by nearly 20 per cent against 10 per cent in the first half in order to meet the full-year target of 15 per cent.
In this campaign, SCB is likely to focus on the upper-income segment
The bank in fact covers all segments, and its credit-card customer base is depositors, so it runs a quality portfolio with low bad debt of 1.2 per cent versus 2.7 per cent for the industry. It has 2 million credit cards outstanding.
The bank will also launch campaigns to tap the mass market by joining with Tesco Lotus, Tearavath said.
Chatchai Payuhanaveechai, executive vice president of Kasikornbank, said the bank had continued its campaigns especially for travel and would focus on shopping in collaboration with leading department stores.
“We have concentrated on upper-income earners because they have purchasing power,” he said.
However, even though lenders are aggressively promoting campaigns, these are not expected to lead to high household debt because the outstanding loans of this industry, at Bt300 billion, are only 3 per cent of total household debt of Bt9 trillion.
KBank’s credit-card spending for this year is now expected to increase by 20 per cent instead of 30 per cent after the first half saw only 17-per-cent expansion.