December sees highest overseas card spending by Bangladeshis in 2024

In December last year, Bangladeshi nationals spent Tk834 crore abroad on goods and services via credit and debit cards, marking the highest expenditure recorded for the year, according to Bangladesh Bank data.

Although year-on-year spending via cards declined by just over 10%, with overseas Bangladeshis spending Tk929 crore in December 2023.

In addition, Bangladeshis made transactions worth Tk45,055 crore within the country using cards from various banks in December, the highest in the last six months.

The Bangladesh Bank's Statistics Department analysed data from various commercial banks and financial institutions, including information on credit card usage by foreign nationals in Bangladesh.

Tasnim Hussain, executive vice president and head of Cards at Eastern Bank PLC, told TBS that banks typically offer various promotions to credit card users in December, which is why transactions tend to surge during this month.

"With educational institutions in Bangladesh closed during this period, many people travel abroad with their children, contributing to the rise in foreign currency transactions via cards," he said.

"There was a dollar shortage in banks in recent months, which is why we permitted travellers to endorse up to $6,000 in their passports, despite being eligible for $12,000. Now that the dollar flow has stabilized, the limit has been removed, allowing customers to endorse up to $12,000 if they choose," he added.

According to central bank data, dollar spending abroad via cards dropped to its lowest level in 13 months last August, Tk373 crore, following the fall of the Awami League government. The decline was mainly due to the nationwide unrest, liquidity issues in some banks, and disruptions in the financial sector.

The head of the card division at a leading bank told TBS, "Credit card usage dropped significantly in July and August. Due to inflation, customers were forced to reduce spending, and the nationwide unrest disrupted normal banking operations."

He said that both domestic and international card transactions saw a significant increase in December, which is typically a positive sign, as banks offer various promotions and many Bangladeshis travel abroad.

"However, one reason for the decline in card transactions abroad in December 2024 compared to 2023 is the ongoing complications in obtaining visas for India. If not for this issue, transaction volumes would have been higher," the official added.

Which countries are Bangladeshis spending the most in?

According to Bangladesh Bank's November data, the highest credit card spending by Bangladeshis was in the United States, accounting for 15.87% of total transactions. It was followed by India (10.94%), Thailand (10.74%), Singapore (8.92%), and the UK (7.98%).

Credit cards issued by other countries but used within Bangladesh saw the highest transaction volume in Department Stores, making up 36.64% of all transactions in November 2024. Additionally, Cash Withdrawals accounted for 26.98%, while transactions in Transportation represented 17.56%. The remaining sectors contributed 18.82% to total transaction amounts.

Domestic card transactions hit 6-month high in Dec

In December 2024, domestic card transactions reached Tk45,055 crore, the highest in the past six months. Tk51,652 crore transactions were recorded in June. Since June, transaction amounts have ranged between Tk34,000 and Tk40,000 crore. The easing of the banking sector's liquidity crisis in December contributed to the increase.

A Bangladesh Bank Payment Systems Department official highlighted how banking services have evolved, noting that card and app payments have replaced the need for traditional in-person banking. 

"Transactions such as shopping bills and utility payments can now be made conveniently, and transferring money between banks is just a click away. This has reduced the hassle of carrying cash," he said.

To boost card usage, banks are offering promotions such as discounts on shopping bills and free access to airport lounges based on card type. Card transactions have steadily increased since the COVID-19 pandemic, growing from Tk20,672 crore in 2020 to Tk45,352 crore in 2023. However, December 2024 saw a slight decrease compared to December 2023.