VietNamNet
Bridge – Commercial banks criticize people for the habit of using cash instead
of credit cards. However, people argue that the overly high fees prompt them to
carry cash instead of cards when traveling abroad.

Due to the
limited supply, banks refuse to sell foreign currencies to many people who have
a legitimate demand for foreign currencies, including the ones who travel
abroad, study abroad or those who are abroad for medical treatment. State’s
officials have advised people to use credit cards instead of cash, which eases
the pressure on the domestic foreign currency supply, while it ensures the
safety for travelers. However, people still insist on using cash, and keep
coming to commercial banks to ask for foreign currencies.

Strict requirements

Tong Chau,
who lives in Go Vap District in HCM City, said that credit cards like Visa Card
and Master Card are considered a kind of lending without required mortgaged
assets, therefore, banks always ask card holders to prove that they have a
monthly income of 10 million dong at minimum, have an indefinite labor contract
and have a monthly wage paid through bank accounts. Therefore, not every one
can meet the requirements to have Visa or Master Card. Meanwhile, those
travelers, who cannot meet the requirements, have to mortgage Vietnam dong at
banks in order to obtain credit cards

Overly high
fees

Currently,
when using Visa and Master cards to withdraw cash in foreign countries, card
holders have to pay two kinds of fees and interest rates. The fee for
withdrawing money is charged at 4-7 percent and the foreign currency conversion
fee is charged at 3-4 percent, which means that card holders will have to pay
7-11 percent for the two kinds of fees. Meanwhile, the lowest possible interest
rate card holders have to pay is 21 percent per annum (0.06 percent per day).
In case card holders make payments for goods and services, the foreign currency
conversion fee would be 3-4 percent.

As for
debit card like Visa Debit, card holders have to pay transaction fees. If they
withdraw cash in foreign currencies, they will have to pay the cash withdrawal
fee and foreign currency conversion fee of 7-11 percent, which is much more
costly than purchasing dollars on the black market. If using Visa Debit to make
payment, card holders will have to bear the foreign currency conversion of 3-4
percent. Besides, they also have to pay many other kinds of fee, including the
annual fee of 200,000-300,000 dong.

The strict
regulations and the overly high fees have made people hesitate to open credit
cards. This also explains why people prefer asking banks to sell 7000 dollars –
the maximum sum of money people can buy when they travel abroad as stipulated
by the current laws.

People call for fee reductions

In order to
ease the demand for foreign currency cash and encourage people to use credit
cards, Eximbank has decided to slash the foreign currency conversion fee to 2.5
percent. Meanwhile, Dong A Bank has been persuading travelers to make a deposit
in Vietnam
dong at the bank to get short term credit cards. After the trips abroad, the
deposited money left will be transferred to one-month term deposit. After the
bank collects information about the card holders’ transactions in foreign
countries (30 days), it will terminate the credit cards.

Finance
experts have suggested commercial banks lower the foreign currency conversion
fee in order to encourage people to use credit cards instead of cash. They said
that the gap between the official exchange rate and unofficial exchange rate is
now small at 300 dong per dollar, therefore, it is unlikely that card holders will
make the corrupt use of the trips abroad to withdraw money for  profit.

The report
on the card market in Vietnam
released by the US Research and Markets, a surveying firm, showed that credit
cards now just account for 1.5 percent of the payment card market. There
remains a big opportunity for card issuers.

Source: Nguoi lao dong