Card transactions in June soared due to a rise in foreign currency dealings, as people relied more on credit cards for travels as cash dollars have become increasingly hard to find.
Compared to May of this year, the total transactions using cards grew by 31%.
On top of that, credit card debt has surged as people struggle to keep up with the high cost of living with rising inflation
As per the central bank’s e-banking and e-commerce statistics report, card transactions in June stood at Tk37,699 crore, which was Tk28,764 crore a month before.
The number of card transactions also went up by 18.89%. The total number of transactions in June was more than 3.98 crore, which was 3.35 crore in the previous month.
On a year-on-year (YoY) basis, credit card transactions have increased by about 29% or Tk556 crore from June of last year. Credit card transactions in June 2021 were Tk1,935 crore and in June 2022, the number of transactions increased to Tk2,491 crores.
According to industry insiders, people travelling abroad for tourism, education and medical purposes amidst a huge shortage of dollars in the open market for the past few months have increased the use of cards.
The dollar crossed the Tk100 mark for the first time in the country's open market on May 17 and was sold at Tk119 to Tk120 last Thursday due to the shortage of cash dollars, causing the number of foreign currency transactions and local card transactions to increase.
In June, the foreign currency transaction was Tk397 crore, which was Tk356 crore a month earlier according to central bank data.
Besides, the central bank also encouraged people to use credit cards for their foreign payments because of volatile dollar prices in the open market.
As per the regulator guidelines, an individual can carry up to $12,000 a year for travelling abroad. Of which, $5,000 can be taken in cash.
According to Md Serajul Islam, executive director and spokesperson of the central bank, the number of expatriates coming into the country has decreased this year. Therefore, the cash dollars are coming in much less at a time when the country has decreased reserves due to increased imports.
“So, those who are now travelling abroad for medical, education and travel purposes must increase the use of credit cards instead of cash dollars,” he told the media last week while speaking about the dollar crisis in the kerb market.
Alarmingly, along with credit card transactions rising, credit card debt has also surged as consumers struggle to keep up with the high cost of living amid rising inflation.
According to the latest data from the central bank, people borrowed Tk120 crore more from credit cards in June compared to May this year.
The regulator’s data review found that the third highest credit card transaction in the last three years was in June 2022, while the highest transaction through credit cards was Tk2,715 crores in April 2022 and the second highest transaction was Tk2,513 crores in March.
In June 2022, the number of credit cards in the country increased to 3,752,891 against 2,701,342 in June 2021. The number of credit cards in the country has increased by 1,051,549 last year.
Since November last year, credit card transactions have exceeded Tk2000 crore as the use of credit cards has increased among the middle and fixed income group of people.
