Spending of taka through credit card transactions fell by 7.71 per cent to Tk 2, 249 crore in September, down from Tk 2,437 crore in August this year, according to the latest Bangladesh Bank data published on Tuesday.
This amount of transactions in the domestic market is the lowest in seven months. Credit card transactions were at Tk 2,162 crore in February.
The central bank started publishing this data in February of this year.
Talking to The Business Post about the latest data, the head of the card department of a private bank, requesting anonymity, said that high inflation has hit every class in society, including the upper-middle-class and upper-class people, and that led to the fall in credit card transactions in September.
Inflation rose to 9.92 per cent in October from 9.63 per cent in September, according to Bangladesh Bureau of Statistics (BBS) data.
However, Dhaka Bank’s Managing Director and CEO Emranul Haque said, “The use of credit cards increases occasionally. Credit card use increased in October because of the ICC Cricket World Cup 2023. People purchased many things from shops and used credit cards more in October.”
“When countries face high inflation, the use of credit cards increases as at that time people generally don’t have enough cash to buy necessary things. So, people get used to using the credit card to purchase anything, especially from shopping malls," he said.
“We [Dhaka Bank] rewarded some people who used credit cards and contributed more,” he added.
An analysis of the credit card spending pattern showed that about 71.62 per cent of the transactions took place through VISA and about 17.34 per cent through MasterCard.
The expenditure behaviour of the credit cardholders showed that the cardholders in September mostly used credit cards in departmental stores.
About 48.54 per cent of the transactions took place in departmental stores; about 12.85 per cent in retail outlet services; 9.23 per cent in utilities; 8.64 per cent in cash withdrawal; 5.94 per cent in drug and pharmacies; 4.87 per cent in clothing; 3.54 per cent in transportation; 3.11 per cent in fund transfer; 2.20 per cent in business services; and 1.07 per cent in professional and government services, showed the latest data.