A good number of nations have cancelled international flights partially or entirely since February in order to tackle the spread of the novel coronavirus.
Consumers paid around $35 billion for flights across the globe just before the coronavirus-induced pandemic. But they were unable to fly due to the lockdowns, according to the International Air Transport Association.
Clients used credit cards to pay more than 50 per cent of the bills for the flights, creating a difficult situation for the airlines company to refund the money as well.
This has also dealt a massive blow to banks globally as they usually earn a hefty profit in the form of service charges on credit card products.
"Bangladesh is not an exception," said Syed Mohammad Kamal, country manager of MasterCard Bangladesh.
Local clients make a majority of their payments for travel, tourism and lifestyle products through credit cards. But the scenario has completely reversed due to the ongoing restriction on movement, Kamal said.
He, however, said clients have increased purchasing grocery items by using credit cards from their home to maintain the social distance.
"But, the increased purchasing trend in grocery items has not filled up the vacuum."
Users of credit cards have maintained an upward trend in recent years thanks to a combination of banks' aggressive push, a growing aspirational middle-class and increasing awareness about the convenience the payment tool provides.
This has also played a positive role in building a cashless society, but now the whole process is in dire straits.
A large number of mid-level officials at corporate entities who account for the major portion of credit card-holders in Bangladesh have either lost jobs or faced a salary cut because of the collapse of incomes of their employers.
In addition, many of them, who are still on the payroll, are worried about their future as the meltdown lingers and cases of infections from the deadly virus rise.
"The situation has forced them to cut back on spending. As a result, the use of credit cards has decreased to at least 40-50 per cent," said a senior central bank official.
"We have been suffering a big loss from our credit card operation since the last week of March," said Mashrur Arefin, managing director of City Bank, which accounts for 35 per cent of the credit cards in circulation, the highest among all banks.
Between March and April, local transactions of City's credit card fell 41 per cent compared to the previous two months. The foreign transactions of the bank plunged 86 per cent at a time when transaction at point of sale terminals dropped 50 per cent.
The lender issued 8,000 credit cards from January and February and it nosedived to just 140 during the period of March-April.
"Online transaction is the major solution to tackle the ongoing situation. The volume has doubled from 5 per cent of our total transactions to 10 per cent. But this is not enough to keep the business afloat as overall infrastructure and mindset for online purchase is not yet ready," Arefin said.
Brac Bank, which is holding the second position in term of credit cards issued, is struggling to recover overdue loans from cardholders, said Md Mahiul Islam, its head of retail banking.
The bank's card transactions declined to one-third in June compared to a month before the pandemic struck. The lender has so far issued 178,000 credit cards.
Ecommerce transaction through credit cards is on the rise and this is a trend in the difficult time, Islam said.