Russian banks have begun to cut limits on credit cards and reduce their issuance. The Moscow Times writes about this.
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In January of this year, the average credit limit decreased by 19% compared to December, up to 102 thousand rubles. This is the minimum value since April 2022.
At the same time, the volume of issued credit cards fell by 22% year-on-year and by 37% compared to December, to 1.99 million units.
At the same time, weighted average rates and the total cost of credit (VAT) were at the beginning of the year at the level of March-May 2022, slightly exceeding 30% per annum.
On financial marketplaces, rates on offered credit cards ranged from 9 to 70% per annum, and the NIC reached 12-48% per annum.
“Credit cards have always been one of the high-risk segments, they account for 25-27% of overdue portfolios put up for sale. In volume, the figure reaches more than 60 billion rubles,” noted the National Association of Professional Collection Agencies of Russia.
By reducing the limits for unscrupulous cardholders, banks quickly stop the growth of overdue payments, at the same time, those who partially flow into the credit card segment clients to whom banks cannot issue cash loans. So, in order not to refuse to issue a card to the client, banks reduce the initial limit and later increase it – this allows you to increase the loan portfolio.