Preferential quarter

Who benefits from not paying interest for three months?

Rus-Bank is going to issue credit cards with an extended interest-free period of 90 days. This is the first such offer on the Russian market - most banks' credit cards have an interest-free period of no more than 50 days. Few people are ready to follow the example of Rus-Bank - bankers believe that a long interest-free period is economically unprofitable for the bank, and it will have to be compensated, for example, by high rates or commissions.

The first cards with an interest-free period (grace period - the opportunity for a borrower to repay a loan without interest for a certain time) appeared in Russia in 2005. Since then, many banks began to introduce this service to increase customer loyalty.

“By providing the opportunity to repay the loan without interest, the bank increases the attractiveness of the credit card and encourages the client to use it more often,” says Valery Torkhov, deputy chairman of the board of Avangard Bank. Therefore, even such large players as Home Credit and Finance Bank (HCF-Bank) and Russian Standard are going to introduce a grace period for their credit cards. True, some bankers believe that the interest-free period on the card does not always increase the number of people willing to purchase it. “My experience in banks has shown that so far the introduction of an interest-free period has not increased the demand for credit cards. Often, clients expect hidden fees in such cards and choose cards without a grace period,” says Elena Dvorovykh, director of the payment card department at Promsvyazbank. True, the number of borrowers who repay money during the grace period does not exceed 10%, she notes.

Most banks are not yet ready to increase the grace period. “World experience has proven that an interest-free period of 40-50 days is the optimal period for both credit card holders and banks,” says Igor Przherovski, director of the marketing department of HKF Bank. Indeed, there are almost no similar offers abroad either. Three years ago, cards with an interest-free period of up to 90 days were offered by the American Monogram Credit Card Bank of Georgia (with an annual rate of 9.9%, the effective rate on loans was about 24%), part of the GE Money group. But now there is no such product in the bank’s list of offers.

In addition, bankers note, the main source of bank earnings from cards with an interest-free period is stimulating the client to pay for purchases with this card. From these operations the bank receives income of 1% of the amount paid by card. “Because the interest-free period is increasing, the client will not pay for purchases for large amounts,” said Mr. Torkhov, noting that increasing the interest-free period is not profitable for the bank. “These costs will have to be reflected in some commissions or rates,” agrees Ms. Dvorovykh.

However, the deputy chairman of the board of Rus-Bank for retail business development, Valery Kardashov, claims that the cost of issuing the card and interest rates on the loan will remain at the same level as for a card with a regular grace period. True, according to Mr. Kardashov, the bank expects to give priority under the new proposal to clients who are ready to receive a “golden” card, the registration of which costs about $100.

Elena KHUTORNYKH