Greece’s Credit Card Market Stuck in Neutral

Greece’s credit card market remains stagnant, despite banks' efforts to encourage their use. Household credit card balances are now even lower than before Greece adopted the euro.

According to the Bank of Greece, outstanding credit card balances amounted to 2.26 billion euros at the end of last October, marking the fifth consecutive year below the 2.5 billion euros threshold. At the time of the euro’s introduction, credit card debt was about 3.7 billion euros, before soaring to nearly 10 billion euros by early 2009.

Banks initially sought to contain the problem by restructuring card debt into instalments, tightening credit criteria, and cutting limits on active cards. Since early 2021, outstanding balances have remained below 2.3 billion euros.

Banking executives attribute today’s stagnation to a fundamental shift in consumer behavior. Credit cards are no longer used as long-term borrowing tools but mainly as payment instruments, benefiting from interest-free grace periods of up to 50 days and instalment plans at no extra cost.

Institutions are now seeking to expand their card base without excessive risk, offering bonuses and rewards through loyalty programs.