21 27 February 2001
Plastic spending on the up
The use of credit cards in Malta is on the rise, and the Maltese consumer is spending more by means of plastic, according to Malta's leading banks.
Both HSBC and Bank of Valletta told The Business Times that credit card usage has risen considerably over the past few years, while the number of cards issued has also gone up substantially.
A spokesman for HSBC estimated that in general, spending on credit cards has increased at the rate of 20 25% on the preceding year, while BoV put the upward trend for spending locally at around 30% during the past three years.
"Expenditure overseas through BoV credit cards has also increased by an average of some 13% each year during the same period," Michael Galea added.
Both banks also reported a rise in the number of new cards being issued.
HSBC spokesman Chris Cini told The Business Times that the average increase in the issuing of new cards hovered around 12 15% over the previous year, while Mr Galea for BoV put the figure at an 11% rise.
Asked whether it was possible to work out whether credit card usage mirrored trends abroad, Mr Cini said that it was difficult to compare, because of economic factors and the maturity of the particular card market.
"However, when considering similarly mature markets, we feel we are experiencing comparable expansion, both where card issuing and card usage are concerned," he added.
Mr Galea, meanwhile, also highlighted the fact that last year, turnover on BoV issued credit cards amounted to nearly Lm19 million.
The bank recently announced that it had decided to rebrand its cards in line with the substantial increase in credit card usage in Malta.
It also said that over the past three years, turnover by Mastercard/Visa at BoV merchant establishments increased by 52% exceeding the Lm40 million mark.
BoV reported that last August, its merchant establishments registered the highest turnover in a month, with payments by Mastercard/Visa exceeding Lm5.3 million.
Meanwhile, a spokesman for HSBC also reported high spending on credit cards over the Christmas period a popular time for cardholder spending.
"December is the busiest month in this regard and usage/spending during last December was no exception," Mr Cini said. "If one compares the spending during December 2000 with the average monthly spending for 2000, there is an increase which is in excess of 35%. Taking this and the increase in spending over the preceding year into account, the indication is that credit card usage and spending is on the increase annually.