Russia’s credit card segment experienced a downturn in August, marking the first monthly decline in five years, according to data compiled by the United Credit Bureau and reported by Kommersant. The market pullback reflects a shift in bank strategies and consumer finance demand, highlighting broader changes in consumer credit behavior during the late summer period of 2024.
Data for August 2024 show that banks issued 2.196 million credit cards to individuals, with the total credit limit reaching 288.2 billion rubles. Both indicators fell by about 5% compared with July, signaling a cautious stance among lenders following a period of rapid card growth. Analysts note that August was the first month since 2020 in which both the volume of new issuances and the monetary value of outstanding limits contracted. The trend underscores a cooling phase after a long stretch of expansion in the card market, driven by shifting risk assessments and consumer spend patterns. This assessment is reported by Kommersant based on UCB figures and is echoed by market watchers observing the lending environment in Russia.
From the lender side, approval rates for new credit card applications have dropped roughly by half in recent months. Banks are recalibrating their product mix, with many turning to consumer loans that can yield higher near-term profits, even as card portfolios tighten. The shift indicates lenders favoring products with quicker repayment horizons and clearer risk margins amid evolving regulatory and macroeconomic conditions.
Industry experts anticipate that the decline in card issuance could persist into the remainder of 2024. Yuri Belikov, chief executive at the Expert RA rating agency, projects that the overall volume of new credit card issuances may contract by 2 to 3 percent by year-end. The cautious forecast reflects a combination of stricter underwriting, tighter credit risk controls, and a softer consumer impulse in late 2024 as inflationary pressures and income dynamics influence household borrowing decisions.
In response to any slowdown in card lending, demand appears to be shifting toward alternative financing channels. Point-of-sale loans and buy-now-pay-later offerings are drawing more attention among consumers who want flexible repayment arrangements for purchases. Market observers, including Dmitry Yanin, chairman of the board at the International Confederation of Consumer Associations, note that installment marketplaces and online retailers may increasingly absorb portions of consumer credit demand as the card market cools.
As this transition unfolds, policymakers and financial institutions have debated the regulation of installment payments in Russia. Banks and BNPL service providers have pushed back against proposed caps on interest-free installments, arguing that curbs on the limit—originally envisioned around 15,000 rubles—could stifle access to financing for a broad range of goods. Proponents of higher limits have cited the need to cover larger-ticket items and everyday essentials that households typically finance through installments. These regulatory discussions reflect a broader policy conversation about balancing consumer protection with access to affordable credit in a shifting lending landscape.
Looking ahead, observers believe the market will continue to rebalance as lenders, regulators, and consumers adapt to the evolving financing ecosystem. The potential for a meaningful reallocation of demand toward BNPL and POS credit hinges on the regulatory framework, the pace of inflation, and the stability of household incomes. In the near term, the emphasis will likely remain on prudent underwriting, transparent terms, and flexible repayment options that resonate with today’s shoppers while preserving credit quality across the sector.