The expert explained the situation on the Russian credit card market

A "credit paradox" has developed in the Russian market, they stated in their research (available to Izvestia) DRT analysts (formerly Deloitte in Russia). Despite the high digitalization of the banking industry, the Russian unsecured consumer loans market is noticeably dominated by cash loans. This phenomenon is explained by excessive bank regulation of credit cards, according to economist Alexey Krichevsky.

The share of Russian adults using credit cards is about 25-30%, which is significantly lower than in Western countries (50-80%) and in comparable economies, including China and Brazil, where about 40% of the economically active population uses credit cards, the expert noted. The economist believes that the reasons for such a low proportion of Russians are related to the inflexible regulation of the credit product. Despite the lower risks on credit cards – the level of delinquency of more than 90 days on cards in 2023-2024 was one and a half to two times lower than on unsecured consumer loans – the full cost of credit card loans is calculated according to the "worst–case scenario", which makes the product risky for banks, and leads to a structural imbalance with a noticeable the predominance of cash loans.

According to the DRT study, the average credit card limit in Russia is about 108 thousand rubles, utilization is about 40%, which contributes about 1.8 percentage points to the borrower's personal debt burden, while a new cash loan adds an average of 15.9 percentage points to the debt burden.

The second reason was the retrospective application of macroprudential allowances — limits are set according to one rule, and capital reserves are required according to other, more stringent ones. Because of this, it is easier for banks to issue a one-time cash loan than to adapt credit card-based products, the expert emphasized.

In addition, in global practice, banks can change the credit card rate in response to economic changes, but in Russia they are limited in their ability to unilaterally reduce or completely withdraw previously approved card limits without the consent of customers. As a result, bankers are forced to take maximum risks in case of fluctuations in the key interest rate. According to Krichevsky, excessive regulation of credit cards pushes borrowers into a gray area — due to stricter rules, Russians turn to MFIs with higher loan rates.

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