Starting from January 1, the central bank has decided to increase the interest rate on credit card loans by 5%, bringing the maximum rate to 25%. According to a circular issued by Bangladesh Bank on Sunday, this adjustment aims to ensure proper loan risk management and align the interest rates with the policy rates and increasing funding costs of banks.
The circular states that banks will determine the credit card interest rates within this new limit, based on loan demand and available funding. Islamic banks, in accordance with Sharia principles, are also instructed to set profit rates for credit card transactions accordingly.
Data from Bangladesh Bank reveals a significant increase in credit card usage amidst high inflation. In September, Bangladeshis spent 2,668 crore taka on credit cards, up from 2,332 crore taka in August, marking a 14.4% rise, or an increase of 336 crore taka.
When it comes to spending abroad, Bangladeshis predominantly use credit cards at department stores, with a total expenditure of 116 crore taka in September. The second most common use was at retail outlets, where spending amounted to 74 crore taka. Both categories saw an increase compared to August.
