A file photo shows a salesman swiping a customer’s credit card at a point-of-sale terminal in the capital Dhaka. Credit card borrowing has skyrocketed as people need to spend more amid rising commodity prices.— Stock Photo New Age

Credit card borrowing has skyrocketed as people need to spend more amid rising commodity prices.

According to Bangladesh Bank data, credit card transactions surged to Tk 2,491 crore in June 2022 from Tk 1,935 crore in June 2021.

The increase in credit card debt reflects consumers’ difficulties in keeping up with rising inflation.

People have rushed to borrow by credit card, an easy way to obtain loan instruments, as the prices of all commodities have soared in recent months.

Consumers are grappling with soaring commodity prices since October 2021 that intensified after the start of the Russian-Ukrainian war.

Thus, credit card transactions have exceeded Tk 2,000 crore since November 2021 as credit card usage increased among middle and fixed income groups.

People can use credit card loans to buy basic necessities, especially groceries, more than technology or luxuries.

The number of credit cards in the country increased by 10,51,549 to 37,52,891 at the end of June 2022 from 27,01,342 in June 2021.

People borrowed Tk 120 crore more on their credit cards in June compared to May.

In June, credit card transactions ranked third.

The highest amount of credit card transactions was Tk 2,715 crore in April 2022 and the second highest was Tk 2,513 crore in March 2022.

On August 5, the government revised the prices of all fuel oils at the consumer level, increasing the prices of gasoline, diesel, octane and kerosene by almost 50%, although the country’s economy is under pressure due to inflation.

Rising fuel oil prices have had a negative impact on people’s lives and livelihoods as the prices of almost all types of commodities have increased dramatically within days.

Moreover, the devaluation of the taka against the dollar has become another concern as it plays a key role in driving up inflation.

The exchange rate of the US dollar against the taka, the local currency, reached 119 Tk in the informal or curbside market on August 10.