MAF Finance sees credit card spend jump 100%

There are signs that recession-wary UAE shoppers are back to shopping on credit after keeping tight controls on their spending habit last year, with a local credit card issuer announcing that it has seen spend on its cards double this year.

 “There are more and more customers shifting their spends to [our] credit cards with an increase of over 100 per cent compared to last year. The main reasons for this are the introduction of new benefits such as fraud protection against lost and stolen cards and purchase protection against theft and damage, which are over and above the already attractive benefits our customers enjoy,” Rasool Hujair, CEO of Majid Al Futtaim JCB Finance, told Emirates24|7.

MAF JCB Finance is the issuer of Najm Visa and Najm JCB credit cards.
 
The MAF Finance CEO added that the company has also not seen any increase in defaults on its credit cards. “Our risk results are consistent as the vast majority of our customers continue to meet their financial obligations. Of course, there are always a very small number of card holders who get into difficulties but I am pleased to say that the number remains static,” said Hujair.

That the cards business is a lucrative one despite rising individual defaults is clear from the fact that banks in the country are undertaking massive marketing efforts, including free-for-life schemes and 0 interest for promotion periods, to attract customers to their plastic.

Abu Dhabi Commercial Bank recently announced the completion of its takeover of Royal Bank of Scotland’s (RBS) retail operations in the UAE, and said that that doubled its credit card business while adding over 250,000 new retail customers to the bank.

The increased spend via credit cards is in sharp contrast to what was happening last year, when the banking sector saw an increase in the usage of debit cards as opposed to credit cards as shoppers were reluctant to use credit.

“In 2009, credit card spends have been flat vs the previous year. On debit cards, we have seen a consistent increase in usage (both at ATM and retail). However, the predominant growth has been from ATM withdrawals. This is in line with recent studies which suggest that in the current economic backdrop, customers tend to use debit cards more frequently as it helps them control building up debt,” a leading banker told this website while speaking of the increase in the usage of debit cards vs credit cards.

However, a recent survey also points out that nearly one-third of the credit card holders in the UAE and their Saudi counterparts are dissatisfied with their existing credit card provider.

Anil Pathak, Client Services Director, TNS Finance Sector, said: “The dissatisfaction with credit card providers has increased in the past year. In Saudi Arabia 38 per cent of those surveyed expressed dissatisfaction saying that banks place too much effort on new customers at the expense of servicing existing customers.”

He said that one in three users would switch to another bank at a given opportunity.

“This is a clear signal for card providers in the region to take notice of rising dissatisfaction and to focus on finding new ways to better take care of the existing customer base, or else face a massive fallout.”

Follow Emirates 24|7 on Google News.