Credit card holders tend to use credit cards for settlements more often than for cash withdrawals, - say "Hansabankas" experts
2005-10-03 Back
Lithuanian residents are changing their habits of using payment cards - more and more often they use their payment cards to settle for services and goods, rather than only for cash withdrawals. "Hansabankas" experts are of the opinion that credit card holders are particularly active in effecting settlements with payment cards.
85 per cent of operations with "Hansabankas" European standard credit cards "Visa" and "Mastercard" represent settlements for goods and services. Such settlements also account for approximately 65 per cent of the credit card turnover. For the sake of comparison we might note that turnover of settlements using all cards issued by Lithuanian banks makes up about 15 per cent of the total card turnover.
"The fact that residents are increasingly more active in using cards for settlements, rather than for cash withdrawals from ATMs, is a certain turning point in the Lithuanian payment cards market. However, meanwhile it is observed only in credit cards market. Credit cards as such are more innovative than debit cards and therefore their holders more quickly get used to modern designation of financial products. Moreover, there is a tendency to perceive credit cards as granting particular stance to their holders, because once an individual shows this card and uses it for payment, he or she is treated with greater credibility and respect,"- said Vitalij Rancev, Director of Payment Cards Department of "Hansabankas".
According to V.Rancev, while encouraging residents to be more active in using credit cards in future, "Hansabankas" until the end of the year relieves the acquirers of credit cards from payment of card maintenance fee for the first year (so far charged from LTL 29). Also, those customers who have acquired "MasterCard Standard", "Visa Classic", "Citro?n VISA" and "Subaru VISA" credit cards and have used them to settle for five purchases, will get back LTL 5 per each purchase to their account (the purchases should be acquired within 1 month of the acquisition of the card and cost LTL 30 or more each). Whereas the holders of new "Gold" and "Platinum" class credit cards will also benefit from more favourable conditions.
"Hansabankas" European standard credit cards are of two types - "VISA" and "Master?ard". All "VISA" cards offered by "Hansabankas"are provided with microchips, and "VISA" as well as "Master?ard" credit cards are additionally secured under "Security Programme". According to this programme "Hansabankas" undertakes to indemnify financial losses which might be incurred by a customer in the event of loss of the card until its blocking (24 hours). "Hansabankas" also undertakes to refrain from charging credit cardholders with card blocking fees.
"Hansabankas" credit card interest is among the lowest interest in the market - from 11,5 per cent. Customers also benefit from "grace period" - having used the credit interest is not calculated for even up to 30 days of the day of settlement with the card.
Moreover, credit cardholders are free to select a certain payment pattern - those who are going to borrow more will pay smaller interest, whereas those who are going to rely more on their own account - will benefit from lower annual maintenance fee after the first year. "Hansabankas" credit cards have other attractive features. Their holders will not need to obtain additional insurance cover when travelling abroad, because as holders of "Hansabankas" credit cards they are automatically insured with "Lietuvos draudimas".
According to the data of eight months of this year, "Hansabankas" has issued 951 thousand payment cards. As of 1 September 2005, "Hansabankas" has issued over 72 thousands of payment cards which or about 8 per cent of the total payment cards portfolio.
In the countries of Western Europe payment cards account for approximately 20 per cent of all payment cards, whereas in Estonia credit payment cards at present make up 18 per cent of all payment cards.
