Credit cards are behind majority of expat ‘skips’
A new report says most defaulting expats leave credit card bills behind, and the largest group of defaulters is Indian.
May 16, 2010 1:10 by Samuel Potter
Incidences of people leaving the UAE because of credit card default recorded a sharp rise between 2004 and 2009, reports Emirates Business 24-7. The paper quotes a report that says 30 percent of expats leaving because of debt in 2004 owed money on credit cards; that figured had climbed to 66 percent by Q3 2009. The “Skip Report” was created by Orion Analytics, who analyzed bank records.
“The sudden shift cannot be attributed to tightened bank lending policy, since the commercial banking sector did not reorient lenient lending policies till well into the recession, when both credit card and loan defaults rose in an unprecedented manner,” says the report.
“Increased credit card activity, in fact, epitomized the boom years of the economic upswing. Banks set few conditions for extending the service and in most, a salary account was enough to issue credit cards. The pattern shows that card issuance increased around 2003, and defaults started registering an increase the following year onwards,” it says.
In keeping with the demographics of the region, the report says Indians, Pakistanis, and Filipinos are the leading nationalities in terms of skipping.