Thailand plans fresh measures to rein in a fast-growing credit card industry blamed for rising household debt as it tries to avoid a possible consumer credit bubble.
The measures, expected to be announced by the Bank of Thailand later this month, come as a surge in the number of credit cards sparks worries among some analysts that Thailand risks some of the consumer debt problems that hit South Korea.
The moves would include raising minimum monthly payments to 10 percent of outstanding debt from five percent and withdrawing cards on which payments are three months overdue, central bank officials said last week.
Card issuers would be required to keep a cardholders' outstanding debt on all cards at a maximum of five times monthly income, they said. Issuers also would not be allowed to solicit customers or offer them gifts for signing up.
"The new rules will help fix loopholes and encourage people's spending discipline to avoid overspending," central bank Deputy Governor Tarisa Wattanagase told reporters.
The measures will be the second time the central bank has acted to rein in credit card spending. In late 2002 it introduced a minimum monthly salary requirement of 15,000 baht ($380) and imposed a ceiling of 18 percent on annual interest rates charged by Thai card issuers.
Nevertheless, the number of credit cards kept rising, by 23 percent in 2003 to 4.22 million, while outstanding debt on them rose 33.7 percent to 76.2 billion baht, central bank data showed. The figures cover only cards issued by banks.
Many Thais hold three or four credit cards. With banks and finance companies fighting for customers in a booming economy, getting a card free of charge is becoming easier.