Russian spending on credit cards has reached an all-time high

According to credit agencies, the sharp increase in credit card costs is due to the persistence of consumer habits amid high inflation. Another reason is expensive cash loans: Credit cards’ long grace periods allow you to defer interest-free payments and keep funds in deposits while your profitability grows.

Another reason is older credit cards with more favorable terms of service. “If a credit card was issued a long time ago and has a low interest rate, then its use even outside the grace period is justified, due to the significant increase in the cost of consumer loans,” explained Konstantin Borodulin, director General NRA Financial Institution Ratings.

The total credit card portfolio of Russian banks at the end of September amounted to 4.28 trillion rubles, of which payments overdue for more than 90 days amounted to 483 billion rubles. However, starting in August, the volume of credit card issuance has been decreasing. In September, banks issued cards worth 200.88 billion rubles (1.83 million units), while in August – 229.21 billion rubles (2.06 million units).

In addition, Russians are increasingly being denied unsecured consumer loans: only a third of borrowers receive them. At the end of September, the approval level fell to 34.4% compared to 35.3% in August.

One in two borrowers has problems repaying their loans and many do not know their credit rating, said Lyudmila Spiridonova, executive director of the NAFI analytical center. The volume of overdue debts of individuals in Russia has exceeded 3 trillion rubles and continues to grow, said Evgenia Utkina, deputy general director of the ABK collection agency.