$7.7bn outstanding on GCC credit cards - report

Consumers in the GCC owe an estimated $7.7bn in outstanding credit card debt, according to new figures from research and advisory firm Lafferty Group.

An average of $1,135 is owed on each of the 6.8 million credit cards in the region, according to Lafferty data seen by Arabian Business.

The figures are based on research conducted by Lafferty’s World Cards Intelligence unit, which compiles market and competitor intelligence on credit cards and consumer finance across 65 markets worldwide.

According to the London-based firm, outstanding debt on credit cards in the six GCC nations peaked in 2009, at just under $8bn.

Lafferty added that not all of the outstanding debt will be reclaimed. Gulf banks are expected to write off close to $600m in net-credit losses on cards in 2010, the firm said.

“Unemployment has been rising and people can’t afford to pay off their credit cards, which is typically the first line of product to go,” Andrew Neeson, head of World Cards Intelligence and Consumer Finance Research at Lafferty, told Arabian Business.

“People tend to pay off their mortgage first and credit card last, if they’re struggling,” he added. “Across the GCC region they employed a lot of outside workers from different countries, and a lot of those people have left without paying their debts.”

In May this year a report revealed that credit card defaults were the main reason behind expats skipping the UAE without settling their debts in 2009. A sharp rise in credit card-related skips was seen last year with 66 percent of all departures attributed to the problem, compared to just 30 percent in 2003, the report by Orion Analytics said.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Features & Analysis
Design thinking or the importance of being human

Design thinking or the importance of being human

Having recently conducted a workshop on design thinking in Dubai...

GCC's class act threatened by teacher shortages

GCC's class act threatened by teacher shortages

A global shortage of school teachers is particularly hurting...

Revolutionary wristwear: TAG Heuer's connected watch

Revolutionary wristwear: TAG Heuer's connected watch

Welcome to the age of the smart watch. And far from leaving it...

Most Popular
Most Discussed