Lankan bank to buy credit card debts

Credit card outstanding balance transfer from one card to another has been introduced in Sri Lanka as a growing number of Sri Lankans are failing to pay their credit card bills due to economic difficulties.

Pan Asia Bank has stepped in to offer this “Balance Transfer” facility through its ‘Black’ MasterCard at a reduced interest of 19.75 per cent whereas the market rate is 24 per cent per annum providing consumers a benefit of 4.25 per cent p.a. on their revolving balances, Irshad Ali – Deputy General Manager (Retail and SME Banking) told the Business Times.

Debt-ridden credit card owners paying very high interest rates and hidden charges now would ease their plight through value additions and offerings aimed at making life easy through Pan Asia Bank credit cards, he added.

Credit card debt repayment defaults are a potential warning sign that more households are struggling with their finances as the country’s economy weakens, he said.

This benefit can be obtained by transferring the other bank credit card balance to Pan Asia Bank credit by simply availing the “Balance Transfer” facility of the bank.

According to Central Bank sources, the country’s bank credit card outstanding balance is estimated at around Rs. 48 billion with around one million cards owned by around 450,000 customers.

The outstanding balance of active cards continue to soar at Rs. 6.8 billion in 2012, up from Rs 6 billion in the previous year.

“The credit card business operates predominantly on interest but if the interest is very high, cardholders will find it difficult to repay the debt due to high cost of living,” Mr. Ali said.

Credit card debt repayment defaults are a potential warning sign that more households are struggling with their finances as the country’s economy weakens, he said. This benefit can be obtained by transferring the other bank credit card balance to Pan Asia Bank credit by simply availing the “Balance Transfer” facility of the bank.