Saudi consumers are enjoying expensive foreign holidays full of beach trips, shopping and unplanned credit card fees.
According to Arab News a new survey published from Souqalmal.com reveals that the majority of Saudi credit card holders are racking up credit card fees and interest rate debt. The survey indicated that about one-in-five Saudi credit card customers use their credit card to take out money. Without realizing the high fees, respondents said they are becoming frustrated with the high charges incurred from ATM withdrawals.
The survey's participants complained that interest rates from credit card spending were extremely high. They even said charges exceeded the amount of money spent on the card. Forty percent of consumers said they think credit cards are "unattractive."
“This can be attributed to lack of awareness among card-holders about the interest rates. Saudis look for avenues to raise additional money especially when they want to travel, without paying attention to the extra cost that they will be paying,” explained Essam Khalifa, a member of the Saudi Economic Association.
The study reported that 30 percent of Saudis claimed they primarily use their credit card when traveling on holiday or to pay for online purchases.
However, credit card fees are not the sole culprits.
“This also means that most Saudis can’t see through the month based only on their salaries, and have to rely on withdrawing cash from credit cards," said Khalifa.
"Frankly speaking, most Saudis use up their salaries much before the end of the month, and they find it difficult to budget their expense or to save money."
Khalifa further explained that generally, Saudi consumers try to save money by using their credit cards to make payments. They will also apply for bank loans for financial aid. The report indicated the 25 percent of a Saudi consumer's monthly will go towards repayments. Many consumers are already in debt at the time of credit card use, which makes it difficult for them to manage a financial budget.
Other variables such as high-inflation and unbalanced minimum wages that middle-class consumers are given have also contributed to the financial problems.
To read the full article at Arab News click here.