Chart, credit cards, spendings : growth rate falls

Credit card spending grows despite economic slowdown

This is the title of a news on TNA. Back luck, I follow carefully the data of Bank Of Thailand about credit cards since more than one year…

The article says :

The BoT Financial Institution Policy Group reported the number of credit cards in the financial institution system in October totaled 12,867,379, up 186,415 or 1.47 per cent from September.

The spending through credit cards in October totaled Bt 76.45 billion, up 2,078 or 2.79 per cent.

Data are correct. What is misleading is the comparison month-on-month. A comparison year-on-year is more appropriate to find the long terms trends and movements.

And in this case, the number of cards increased 8,5 % (compared to october 2007)… and spendings went up… by 1,45 % only.

In other words : more and more cards, less and less spendings (per card).


You see : a healthy growth ! 185 415 new cards (accounts) were issued in october ! The second highest month… since january 2006.

The banks and financial institutions are printing cards like there is no… crisis.


But problem : spendings have reached a plateau.

Therefore : average spending per card is going down. And absolutly not “up” like TNA says.

And the growth rate (y-o-y) in percentage is really clear : the growth rate is falling. From +20 % beginning 2006…. to +1,45 % in october… The lowest point.

The forecast here is easy to make : soon, we could have negative growth.

And we will have certainly a continuous decline in average spending per card (because I believe that the total number of cards will continue to increase).

(source BOT, table FI_CB_080_S2).

7 Responses to “Chart, credit cards, spendings : growth rate falls”

  1. 1 chinesethai 12 December 2008 at 2:15 am

    To people of what income level were the new cards issued?

  2. 2 ThaiCrisis 12 December 2008 at 5:20 am

    The BOT does not provide those data.

  3. 3 Halfaboy 12 December 2008 at 5:36 am

    Almost without asking me the Bangkok Bank provided me with two (!) credit cards. After I told them that I did not know what to do with these cards as I am holding already a Visa card, American Express, Diners Club and Euro card they told me that it was very handy to have these cards as I will not suffer from bad exchange rates. I tried to explain that my money on my Thai account comes from abroad, but to no avail. I have accepted the cards (free, no annual contribution) but have not the intention to use them.

  4. 4 ThaiCrisis 12 December 2008 at 5:55 am

    HB : it could be explain the surge in newly issued cards. 😉 “American style”, get 2 for 1, free.

    I saw a set of data about the balance sheet of Commercial Banks… with the fees they get from cards… It’s going up strongly of course. I’m going to make a small chart.

    The banks are pushing the plastic, without any doubt.

  5. 5 thaioutsidein 12 December 2008 at 6:11 am

    spending per card number is not that useful. if i have more credit cards in my wallet, spending per card will naturally decline.

    The fact that it was still flat (up 1%) means that consumer spending is not (yet) as bad as feared. With more layoffs next year, though, that picture might change.

  6. 6 ThaiCrisis 12 December 2008 at 6:33 am

    … and subsequently, they can not say that spendings are “growing despites economic slowdown”…

    As for the number of cards, it is interesting. Because, this indicator can mislead people (more cards = good, right ?). So we have to cross with the average spending.
    And secondly, it’s an indicator about the policies followed by the banks and the other financial institutions. They’re pushing not to follow an economic environment, but to increase their fees. It is short sighted, and it could backfire (at one point customers with multiple card could become fed up to pay fees… and customers with low level of income could become insolvent with their cards).

  7. 7 ray 12 December 2008 at 7:58 am

    what we must see is on what are the public spending the cards? is it on luxury items or grocery items?? right now i think most peope are spending on day to day items because money is so tight .. and i believe more and more people will want new cards to extend the spending prowess but their appications will not be approved.. its a bank!! they will loan u money when u dont need and when u cannot do wothout it the wil cut yr credit limits.. that always the story with banks

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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