Credit Card Balance Declines to Rs.149.7 bn, High Interest Rates Remain a Concern
The decline in outstanding credit card balance in Sri Lanka may seem like a positive sign, but the high interest rates on unpaid balances are still a major concern for consumers. Despite the easing financial conditions and lower prime lending rates, credit card interest rates remain around 28 percent, making it difficult for individuals to manage their debt effectively.
Banks have been trying to encourage more card usage through promotional campaigns and offers, but the reluctance to accumulate high-interest debt is understandable given the current economic climate. The lack of rate cuts for small businesses and individuals has also been a point of contention, with many feeling that the benefits of lower interest rates are not being distributed equitably.
While business confidence has improved, consumers are still feeling the impact of high taxes and tight credit conditions. Lower taxes and more accessible credit options are needed to stimulate consumer spending and support economic growth.
As the economy continues to recover from the challenges of the past year, it is crucial for financial institutions and policymakers to address the issue of high credit card interest rates. By making credit more affordable and accessible, they can help individuals and businesses navigate the post-pandemic landscape more effectively.
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