Credit Cards Market in Russia: Myths and Reality

Abstract

The article disproves the current myths about the functioning of the credit card market in Russia in the area of: a) the insignificance of the banking segment; b) the «usual» cost of borrowing; c) ease of use of grace-periods (preferential interest-free periods); d) low impact on the growth of borrowers’ debt load; e) the possibility of using non-activated cards as a strategic financial reserve; e) economic attractiveness of a new type of credit card – installment cards; g) foreign experience in the functioning of the credit card market in developed countries (using the example of the UK). On the basis of analysis carried out by the author, he has formulated a number of major problems that impede the effective development of the credit card market in Russia at the present stage and suggested a number of debatable solutions.