Business | Banking
GCC's credit card spending second highest in the world
The UAE, with a population of nearly five million, has some 1.8 million credit card users and average spending by cards in the region is the second highest in the world, a banker said yesterday.
- By Arif Sharif, Staff Reporter
- Published: 00:00 December 6, 2006
Dubai: The UAE, with a population of nearly five million, has some 1.8 million credit card users and average spending by cards in the region is the second highest in the world, a banker said yesterday.
Burhan Khan, head of consumer banking at Dutch bank ABN Amro, told Gulf News average spending by credit card in the GCC region of 2,000 euros a year is the highest in the world after Canada.
High income levels, rapid economic growth over the past few years and a proliferation of leisure and shopping opportunities in the region is driving spending.
ABN Amro, one of 26 foreign banks operating in the country, launched a new credit card yesterday co-branded with the UAE's biggest electronics retailer, Jumbo, hoping to win new customers with attractive bundled product offers.
The bank, among the top-three card issuers in the UAE, said the new segment-focused card will give customers exclusive access to a range of privileged deals at Jumbo Electronics' 31 UAE outlets.
The new card carries an annual fee of Dh200 but users can obtain reward points of an equivalent value if they spend more than Dh1,500 over a three-month period.
While the MasterCard-backed card carries a monthly interest of 2.49 per cent, customers will also have the option of buying high-value products in fixed instalments at an interest rate of 0.99 per cent.
Khan said the bank hoped to add 60,000 new customers over the next 18 months to its existing card-base of 240,000 with the new product.
Arvind Nair, Jumbo Electronics' CEO, told Gulf News he hoped the new agreement will help promote trust and consumer confidence in Jumbo, whose outlets receive more than two million visitors a year.
"Half the UAE's population is below 25 years of age and is continuously looking to upgrade to new products like digital still and video cameras, laptops, mobile phones and LCD TVs and a card like this will help," Nair said.
Retail banking
Retail margins in consumer electronics in the UAE are the lowest in the world but this is compensated by high productivity of space and working capital, Nair added. Per ticket purchase at a Jumbo store averages about Dh800-Dh1,000.
ABN Amro expects its revenues to rise 30 per cent this year. Fifty-six per cent of its revenues is contributed by the retail bank, of which credit cards make up 60-65 per cent.
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