Credit Cards in Russia |
Russia Plans Pushing Credit Card Applications on its Market
Credit cards are coming into active use in Asia and Eastern Europe. These small plastic things are becoming the dominant tool for purchasing things and managing personal and business finances in Russian as well. Not so long ago, however, until somewhere 2005, Russian shoppers had to be content with small consumer loans taken out to buy cars or technical appliances.
Looking at today's figures, western observers and financial experts venture to claim that Russia is on the firm and irreversible way to a competitive credit card market.
The credit industry deregulation that made credit cards highly expensive and debt threatening for average-income American customers teaches Russian creditors about what effect credit card lending may have on the native customers.
Coupled with the lack of proper credit card education, this historical factor may perhaps be deterring the adequate and fast development of the strong credit card market in the country. However, the fact that credit cards are the financial future of the country, putting it on equal footing with the developed Western society, is irrefutable.
Today Russia can boast of doing business with the world's largest and richest credit companies - MasterCard, Visa and American Express. According to the figures of 2004, MasterCard issued about 740,000 credit cards and most of the applications were offered in the capital - Moscow.
This is only a very early step in the development of credit card industry in Russia and the national banks, such as Russky Standart together with foreign ones, such as Raiffeisen bank, are aware of the big risk they run, should they shower people with their credit card offers.
Such things as a credit history and credit bureau are still in their infancy in Russia, so the ability to calculate the financial risk for a creditor with mathematical precision is not that easy matter yet. What's more banks are still keeping credit histories of their customers to themselves, making it even more difficult to estimate the credit worthiness and credit risk of potential applicants.
What is done for now is small but decisive steps on the way to the credit card industry much like we have in America and Europe.
What is interesting, however, is that with such a small and weak yet credit card market, Russia has one of the greatest rates in credit and ID theft in the world! Once you take out a credit card to pay at a restaurant or for a hotel room, you may easily have your credit card number stolen and so run huge charges in fraudulent credit card use.
Russian fraudsters have even reached out for Western banking systems and some of the largest breaches of credit and personal information were done not without the part of the smartest of them.
Well, when a strong credit card market comes into existence, and soon it will, it will have to be perfectly well armed against its countrymen criminals.
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