People are trying really hard to pay off their credit cards and stay away from them.
According to Frank Research Group, in December alone Russians cut their credit card debts by 35 billion rubles [just under 6 billion dollars. RV]; for the grand total of over a trillion rubles [170 billion dollars. RV] in 2016.
Borrowers are bashful these days. Or are they financially savvy?
Sociologists tell us that people in Russia do their best to avoid credit cards today. Having said that, the financial market has been growing [in Russia. RV] in astronomical proportions over the past few years. The National Bureau of Credit History informs that over 30 million people in Russia now own a credit card; that’s every fourth citizen.
At the end of 2016, however, the current reversed. Instead of spending more on presents at Christmas and New Year, the people started to… pay off their credit card debts! Altogether, in December of 2016 they paid off 35 billion rubles [just under 6 billion dollars. RV]; for the grand total of over a trillion rubles [170 billion dollars. RV] in 2016, as reported by Frank Research Group. Did the Russians all of a sudden get rich and decided to do away with their debts?
Evgeny Nadorshin, chief economist of PF Capital [Russ. “ПФ Капитал”. RV ] observes, “Credit card debts are very expensive debts; they require high commissions that many people just cannot afford and therefore want to close their accounts as soon as possible.”
Credit cards are usually issued at a 21 – 40% interest rate. Very often banks would offer a so-called “grace period” of two months without interest. But most borrowers need more than two months to pay off their debts, so they inevitably start to incur interest.
Well, now we know better.
By Alexandra Kozlova
Russian source:
http://www.kp.ru/daily/26639/3658517/
Link active as of May 22, 2017. RV