The NCB Financial Group, through its retail banking arm, is seeking to incentivise spending on its highest earning product, the Visa credit card, promising to give five individuals who spend a minimum of $15,000 in one transaction, one million dollars each.

The campaign was rolled out in the first week of July, with the same offer being made to users of its Visa debit card.

Interest rates on the bank’s credit card products now range from 47 per cent to 51 per cent, according to the bank’s website.

The Jamaica Observer reached out to the group to see how credit card interest charges have been affected by the 500 basis points increase in the central bank’s benchmark rate since the start of 2022.

The group responded with their schedule of rates and fees, but did not comment on how the Bank of Jamaica (BOJ) rate hike has impacted charges.

Interest rates are climbing higher and consumers may be more reluctant to spend.

However, NCB’s financial results so far do not indicate a reduction in consumer spending.

Net interest income for the NCB Financial Group for the six months ended March 31, 2022, increased to $34.2 billion, up 19 per cent or $5.3 billion year over year.

The spending pattern in 2021 was also bullish among consumers. The BOJ in its 2021 annual report said that deposit-taking institutions (DTIs including the island’s eight commercial banks) recorded increased income from fees and other charges on card services (particularly credit cards said the BOJ) as some banks resumed the application of fees and charges to customer accounts following temporary waivers during 2020.

In addition, consumers increased their reliance on short-term unsecured debt to meet funding needs.

Total revenue growth for DTIs was supported by an increase of 3.2 per cent ($3.5 billion) in interest income, compared with growth of 2.7 per cent ($2.9 billion) in 2020.

Credit cards in circulation

More credit cards are in use. The BOJ indicates that credit cards in circulation for 2021 amounted to 359 295, an increase of 7.1 per cent when compared to 2020. The number of credit card transactions processed on the proprietary systems of DTIs in 2021 was 27.9 million valued at $688.5 billion.

The central bank said that these figures represented increases of 36.3

per cent (7.4 million) and 26.0 per cent ($142.2 billion) in volume and value of transactions, respectively, relative to 2020.

Apart from its new campaign, NCB indictates on its website that it seeks to incentivise credit card spending in other ways, noting that the Classic Visa card offers cash back of 0.25 per cent paid annually.

It states online, “Visa Classic offers the convenience and security of local and international purchases with the ease of repayment in Jamaican dollars. Go shopping, make purchases online, and use it to pay bills at restaurants and when you travel.”

The group says NCB Visa Classic credit card is accepted at over 10,000 merchants locally and at millions of merchants around the world. The financier also promises emergency cash assistance of 50 per cent of the assigned limit on credit cards at ABMs worldwide.

NCB Visa debit, introduced in 2020, is also being promoted by the bank.