29.03.2024

Named the latest trends in the credit card market

Price competition in the credit card market in the past — banks are fighting for customers with high technology and additional features like cashback.

Affordable luxury

According to the vice-president of VTB Dmitry Polyakov, in 2018 the volume of the credit card market grew by 13% and by the beginning of 2019 it amounted to about 1.5 trillion rubles. Banknotes are still the most affordable, and therefore the most expensive retail product, although the price tags for plastic come close to the rates for cash loans. And, apparently, they have every chance to win this battle.

According to calculations of Sergey Leonidov, the CEO of “Compare.Russia.ru”, credit card rates in the market as a whole are 10–40%. However, bankers admit in backstage conversations, the bottom bracket is more like a fairy tale than reality. Even to proven customers offer price tags not lower, and often above 20% per annum.

According to Ekaterina Martsukova, head of the banking services analysis department at Banki.ru, at the beginning of 2019, the average rate was 28.97% per annum; in the first quarter of 2019, it dropped to 27.14% per annum. But even with a small decrease, such a product can hardly be called cheap.

Nevertheless, the product is very popular. The manager of the St. Petersburg branch, Elena Verevochkina, says that salary customers can receive the lowest credit card rate, while street customers who have confirmed income and employment can rely on a relatively low rate comparable to consumer credit. The expert notes that with lending amounts of up to 600 thousand rubles, the card is almost comparable to cash loans in terms of profitability, and in some cases even more profitable.

Low rate

But in the digitized world, the price of a product has ceased to rule the ball. Polyakov says that the main trend in the credit card market is the development of customer service, in particular, delivery of cards by courier, transfer of services into digital channels. Compared to the size of the bet, much more important parameters are the availability and duration of the grace period, the loyalty program and the cost of maintenance. “Actually, without a grace period, the card immediately becomes noncompetitive,” adds Martsukova.

Especially now, when installment cards are breathing in the back of traditional credit cards — tools that allow you to buy goods and services from the issuing bank partners in interest-free installments. However, such products cannot become a full-fledged competitor to a credit card, because they lack the advantage of flexibility — goods can only be bought in certain stores, so the installment card is more a kind of a POS loan.

But the opened possibility of practically free use of bank money forces marketers to supply ordinary credit cards with various “accessories”. The most popular customer requests for credit cards in the press service of Russian Standard Bank, in addition to the grace period mentioned, are the credit limit and the cost of annual card service, cashback for purchases and the possibility of free cash withdrawals, benefits for travelers, convenient debt repayment and the possibility of registration without visiting the office.

Plastic lifehacks

Unlike cash loans, it is easy to issue a credit card: often banks do not even ask for a certificate of income. It is only necessary to understand that the efforts to issue such a certificate make sense — the more trustworthy the client looks to the bank, the lower the card rate. With the current spread of price tags, the speed of registration is by no means the main advantage: of course, it is easier to get a card without financial documents, but then you should not be surprised that the rate will be 45% per annum, and the credit limit is 30 thousand rubles. The checked and solvent customers are provided with limits from 100–150 thousand rubles to 1 million with the possibility of further expansion with active spending and timely repayment.

It should be noted that a free cash withdrawal on a credit card is a rarity. Martsukova notes that the commission for issuing loan funds averages 4–5% of the amount withdrawn — not only in strangers, but also in “native” ATMs. Moreover, many banks set a commission for the so-called quasi-cash operations, equivalent to cash withdrawals — for example, the replenishment of electronic wallets, the purchase of lottery tickets and others. “Check the availability of such commissions,” the expert advises.

Ideally, a card should generally become the only one in its holder’s wallet. “It’s easier for a client to open one card with a higher limit than to issue a few with a small amount available,” they say in Russian Standard. And this means that in the struggle for the client, the banks will, willy-nilly, have to add various functions to their plastic, which a few years ago served as a regular loan and did not assume excesses.

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