The number of credit card users in Bangladesh is significantly lower compared to that in developed countries. Due to various eligibility criteria set by banks and financial institutions, many individuals are unable to avail of credit card services, even if they wish to. According to a report published by The Financial Express, data from Bangladesh Bank indicates that there are currently 1.62 million credit card users in the country. We have previously analyzed the reasons behind the relatively low number of credit card users in Bangladesh. For further insights, Click Here...
If an individual is deemed ineligible for a credit card based on the criteria of banks or financial institutions, there is an alternative opportunity to obtain a credit card. This can be achieved by securing it against personal collateral or a deposit scheme. Such credit cards are referred to as secured credit cards. To learn more about secured credit cards, Click Here...
Individuals opting for a secured credit card, backed by collateral or a deposit scheme, typically make a small deposit and receive a credit limit in return. Currently, several banks offer credit cards with limits ranging from 80% to 90% of the deposit amount, with a minimum deposit requirement of 10,000 BDT or more. Those holding credit cards with lower limits should exercise increased caution when utilizing their cards to avoid potential financial risks.
Potential risks associated with having a low credit card limit:
1. A low credit card limit increases the risk of exceeding the credit limit. For more information on over-limit scenarios, Click Here...
2. EMI options for purchases are generally unavailable for transactions under 10,000 BDT. For further details on EMI. As a result, having a low limit may lead to complications when opting for EMI. Specifically, the dream of using 0% interest EMI options may remain largely unfulfilled.
3. A lower credit limit could pose challenges in making urgent cash withdrawals or purchases.
4. There is an increased likelihood of careless transactions and outstanding bills, which may result in negative reporting to the CIB. For further information on CIB, Click Here...
5. The annual fees and ancillary charges associated with a low-limit credit card can appear disproportionately high.
6. A limited credit line may restrict access to benefits such as dollar endorsements, airport lounge access, and more.
7. You may be considered ineligible for international roaming subscriptions. Because using international roaming services may require a significant amount of dollars, which must be available within your credit limit.
8. Due to the minimum transaction condition, various facilities may not be accessible, such as flexi loans, cash loans at reduced rates against a credit limit, and others.
9. When the credit limit is low, the card category is usually of a lower tier, such as Silver or Classic. As a result, cardholders may miss out on special benefits, exclusive offers, and priority services.
10. Even if your credit limit is low, your expenses won’t necessarily be lower. This is because banks determine credit card fees, such as annual fees and other charges, based on the card category—not the limit. So, even with a low-limit card, you will still have to pay the same fees. As a result, your costs may end up being higher than the benefits you get from the card.
11. If the card does not have a dynamic currency or global limit feature—meaning separate limits for local and foreign currencies—it can create additional complications when spending in a single currency. Since the credit limit is already low, dividing it into two parts (one for local currency and one for foreign currency) will further reduce the available limit. This may lead to difficulties when using the card for transactions.
Esteemed readers, through the information presented, we do not intend to suggest avoiding the use of a low-limit credit card. Rather, our message is clear: if you are using a credit card with a low limit—particularly those with limits in the range of 10,000 or 12,000 BDT—it is essential to remain mindful of the aforementioned considerations while using the card.