Credit card use slightly down in Feb

Bangladeshi credit cardholders spent a bit less at home and abroad in February compared to the previous month, according to Bangladesh Bank.

The transactions amounted to Tk 3,057 crore, dipping 4.77 percent.

Those on the domestic front decreased by 4.49 percent to Tk 2,558 crore.

Meanwhile the ones abroad were marked by a drop of 6.19 percent to Tk 532 crore.

People have become cautious in using loans for their spending in the face of spiralling inflation, several bankers said yesterday.

Seeking anonymity, an official of a top commercial bank, blamed the high inflation for a reduction in peoples' purchasing capacity.

"Many have cautiously reduced their expenditures through credit cards to reduce pressure on their wallets," he said.

Overall inflation in Bangladesh stood at 9.67 percent in February, according to the Bangladesh Bureau of Statistics.

Although it was down 19 basis points from that in January, the consumer price index persisted at over 9 percent since March.

Ramadan, when consumption of some food items usually increases, began on March 12 and ended with Eid-ul-Fitr on April 11, centring which Bangladeshis tend to purchase a lot of clothes, he said.

So, in anticipation of these, it could be that many people were conservative in spending during the preceding month, meaning February, he added.

"Historically, transactions in February are low as it is a shorter month than January," said Syed Mohammad Kamal, country head for Mastercard in Bangladesh.

Although it was of 29 days, there were two public holidays on February 21 and 26 marking International Mother Language Day and Shab-e-Barat respectively, he said.

Kamal also pointed out the persisting elevated inflationary pressure in the country.

However, he said the real scenario can be better understood though March's transaction figures as it was just ahead of the shopping period marking Eid-ul-Fitr, one of two major religious festivals for Muslims.

On the domestic front, transactions at department stores decreased to Tk 1,269 crore in February from Tk 1,320.6 crore in January.

Meanwhile, transactions at retail outlets and related utilities noted a minor decrease.

In addition, cash withdrawals reduced to Tk 187.7 crore in February from Tk 207.1 crore in January.

Transactions for drugs and at pharmacies declined to Tk 134.5 crore from Tk 137.3 crore while for clothing it fell to Tk 150 crore from Tk 162.5 crore.

A significant portion, or around 71.55 percent, of the credit card transactions took place using VISA cards while around 17.73 percent using Mastercard.

Also, about 10.54 percent of the transactions were made with American Express cards.

Cross-border transaction patterns revealed that the highest amount was in India, accounting for approximately 21.72 percent of the total.

The other places include Thailand (12.23 percent), the US (12.20 percent), the UAE (10.59 percent), Singapore (6.83 percent), the UK (5.93 percent), Saudi Arabia (4.71 percent) and Canada (4.60 percent).
Bangladesh Bank also mentioned that in terms of the amount, transactions by Bangladeshi credit cardholders outside the country were around 2.08 times higher than that conducted by foreign nationals within Bangladesh in February.