Spending on the cards

PUBLISHED : Friday, 14 December, 2007, 12:00am
UPDATED : Friday, 14 December, 2007, 12:00am
 

Credit card issuers expect that recent market fluctuations will encourage investors to reap profits and maintain growth of more than 25 per cent in quarterly card billings this festive season.

The Hong Kong stock market ended 8.64 per cent lower in November as profit taking slashed earlier gains. Spooked by market volatility and mainland government disincentives, investors are looking to cash in for the remainder of the year.

'The fourth quarter is always the time when consumer spending spurts. This year, the consumption pattern is further buoyed by the wealth effect derived from the stock market and the negative interest rate environment,' said Yat-chung Koh, general manager, Greater China, of American Express International.

Market watchers predict the negative real interest rate will decline further next year, which should boost the property market.

Local banks cut borrowing costs in September and this month amid abundant liquidity and are expected to do so again if, as expected, the US Federal Reserve reduces rates next month.

As an indicator on consumption spending, in the first three quarters, the number of cards issued by the industry in Hong Kong grew 8 per cent, while the number of platinum cards grew 75 per cent.

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Spending on the cards

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