Credit cards hard to get as plastic money gains foothold

Credit cards remain out of reach for most Pakistanis even though plastic cards of other kinds continue to gain a firm foothold in the country of 212 million people.

There were only 1.68m credit cards at the end of March, which constitutes a share of 3.8 per cent in 44.5m payment cards currently in existence.

Debit cards form almost two-thirds of the total while social welfare, pre-paid and ATM-only cards collectively have a share of 32pc, according to data from the State Bank of Pakistan (SBP).

“Somehow, credit card acquisition has been a challenge for the banking industry,” said Muhammad Anas, head of consumer banking at United Bank Ltd.

The total number of credit cards has registered no change over the last decade. But its share in the pie has dropped from 15pc to 4pc, thanks to a disproportionate rise in the number of debit cards, which grew at an annualised rate of 12.1pc since 2009-10.

“Auto and personal loans are need-based products with a natural growth path. That’s the reason credit cards’ receivables are much lower compared with auto and personal loan products,” he added.

Outstanding credit card loans amounted to Rs55 billion or just 7.8pc of Rs708bn of total consumer financing at the end of June.