The Bank of Thailand considers reducing minimum credit card debt payment rate from 8% to 5% to alleviate financial strain on consumers amid rising household debt and economic concerns.
BOT Considers Lowering Minimum Credit Card Payment Rate
The Bank of Thailand is considering reducing the minimum payment rate for credit card debt from 8% to 5% to help ease the financial burden on consumers during these challenging times. Rising household debt in Thailand, driven by a sluggish economic recovery and slow income growth, is a significant concern that could lead to increased non-performing loans.
Concerns Over Economic Impact
The move is being urgently discussed, with the Bank ensuring sufficient time for financial institutions to adjust their systems for effective repayment management. The ongoing increase in household debt has raised potential long-term risks for the economy. Measures are being taken to mitigate these risks and support the financial stability of consumers.
Source: BOT Discusses Adjusting Credit Card Minimum Payment
The Bank of Thailand (BOT) has raised concerns over the minimum credit card debt payment rate, which has been stagnant at 5% for several years. This rate, also known as the minimum payment percentage, is the lowest amount that credit card holders must pay each month to avoid late fees and penalties. The BOT is worried that this low monthly payment rate may lead to debt accumulation and financial distress among consumers.
The regulator is considering revising the minimum payment rate to ensure that credit card holders can repay their debts more efficiently. This move is part of the BOT’s efforts to promote financial stability and reduce household debt. The current minimum payment rate of 5% means that borrowers may take a long time to settle their debts, incurring high interest charges and potentially leading to a debt trap. By increasing the minimum payment rate, the BOT aims to encourage responsible borrowing and debt management practices among Thai consumers.
Source : BOT to review Minimum credit card debt Payment rate
