Why do banks introduce the “one credit card per person” policy?
Banks are introducing a “one credit card per person” policy. In particular, VTB establishes a temporary ban on issuing more than one card. The bank itself explains this step as a tightening of monetary policy by the Central Bank and an attempt to reduce the financial burden for clients.
The regulator is indeed intensifying the fight against market overheating and introducing restrictions on the issuance of loans. But banks may have other motives for optimizing this segment, says independent expert on financial markets Alexey Bushuev: “There are most likely internal reasons related to streamlining credit work. There are expansion phases, when, on the contrary, it is interesting to throw many different products onto the market, and there are contraction phases.
In the current market, such a large bank with a developed base can quite reasonably announce a contraction phase in order to restore order, improve the quality of the portfolio, figure out what’s going on with the loans, and so on.
Moreover, in terms of its loan portfolio, VTB probably has enough of the corporate sector, so it may well be able to clean up its portfolio in a good sense and improve its quality. As you know, a person with a credit card has less control over his financial transactions. An elementary example: when paying in cash, expenses are usually almost half as much. Accordingly, VTB apparently decided to greatly limit these games, make its clients more rational, and thereby improve the quality of the portfolio.”
Many Russian banks had previously allowed no more than one credit card to be issued, and exceptions were made only for clients who met many additional conditions. Moreover, in some cases more than one card is necessary, noted financial analyst Andrei Barhota: “Banks profess two strategies. The first is that there must be a very strong product - a credit card, for example, with a long grace period, not very high interest rates for exceeding it, without commissions and service fees. And this product must be so good that everyone wants to own it.
The second approach is to create two or three loan programs. In one case, for example, there is the highest grace period, but other conditions are worse than the best examples, and in the other, a small grace period of up to three months, but at the same time an increased average cashback and an improved loyalty program. Many clients are more interested when there are many products or there is a package offer.
Let's imagine that there is a family with one or two children. The client is looking, firstly, for a product that would provide maximum transaction activity, for example, weekly purchases in supermarkets for a fairly large amount with maximum cashback. This credit card offers a grace period of 50 days. The client uses it, then a situation arises when, for example, he needs to make repairs. He goes for a second credit card, which has a grace period of 150 or 200 days. There the cashback is noticeably less, but the interest-free grace period is longer. And due to the fact that the need for financing is large, this card will be more profitable. It turns out that it is beneficial for the client to have both.”
At the end of August, the Central Bank once again tightened the issuance of loans and used a tool that had never been used before. We are talking about the so-called countercyclical premium. It increases the capital adequacy ratio - one of the most important indicators that reflects the stability of the bank.
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