Transform Your Daily Life: The Essential Role of Credit Cards in Modern Living

Bangladesh’s banking sector is seeing a surge in credit card usage and transactions. In July, the number of credit cards increased by over 18% compared to last year, while transactions grew by more than 32%, according to Bangladesh Bank. By the end of July, nearly 2.98 million credit cards were issued.

Despite this rapid growth, credit cards still account for less than 2% of the total deposit accounts in banks, which are around 1.7 billion. This suggests that while many are adopting credit cards, there’s still plenty of room for expansion.

Banks are stepping up their game, introducing attractive offers and advanced technology to encourage digital payments. The rise of foreign currency transactions through credit cards has been particularly notable. In the past two years, partnerships between local banks and foreign payment platforms have made it easier for travelers. In July alone, transactions in foreign currency jumped over 14%, exceeding Tk 800 crore.

“Credit cards are no longer just for luxury travel; they are becoming part of everyday life,” says Tareq Refat Ullah Khan, CEO of BRAC Bank. He emphasizes that they are now commonly used for groceries, pharmacies, and everyday expenses, making them essential for many middle-class families.

As Bangladesh moves toward digitization, Khan believes credit cards will reshape how people think about spending and financial planning. He points out that regulatory support is crucial for encouraging this change. The central bank has already helped facilitate credit card growth, but greater support can unlock even more potential.

Regulatory requirements have historically limited credit card expansion, according to Syed Mahbubur Rahman, managing director of Mutual Trust Bank. For instance, applicants previously had to prove income tax, a requirement only 4 million could meet last year. Although this requirement was relaxed, a Tax Identification Number (TIN) is still needed, limiting eligibility to about 11.5 million people.

At Mutual Trust Bank, they’ve tailored their credit evaluation process for different professions, speeding up acquisition while managing risk effectively. Meanwhile, UCB focuses on advanced security measures. “We invest in real-time fraud detection systems to keep our customers’ transactions safe,” says Mohammad Mamdudur Rashid, managing director of UCB. They also emphasize customer education on safe card usage to enhance awareness.

However, many customers remain hesitant due to unexpected fees, as highlighted by M. Nazeem A. Choudhury, Deputy Managing Director of Prime Bank. To combat this, Prime Bank has launched Bangladesh’s first-ever Visa Signature Credit Card with no fees. Choudhury describes it as a “lifestyle statement” aimed at the younger generation, promising no hidden costs—just the freedom to spend comfortably.

Overall, as credit cards become more integrated into society, their influence on everyday financial habits is expected to grow. This shift could empower many individuals and families, driving economic growth while promoting a cashless future.

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