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Vietnamese travelers don’t like credit cards because of overly high fees
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.
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Still trading dollars underhand
After a period of “sitting idle” due to the harsh control by the government agencies, some gold shops have resumed dollar transactions.
In the afternoon of March 28, when Nguoi lao dong reporter called a gold shop on Cach Mang Thang Tam Road in HCM City, he was told that the dollar price was traded at 21,250 dong per dollar. Another gold shop on Xo Viet Nghe Tinh Road said it only buys dollars at 21,100 dong per dollar. |
vietnamnet, nguoilaodong
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