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Banks Turn To Credit Cards To Tap Asia's Affluent

Tara Loader Wilkinson

9 February 2012

American Express and the leasing arm of Australian lender Macquarie have tied up to launch an initiative allowing cash-strapped entrepreneurs to finance themselves using their Amex card, the latest example of an Asian bank sweetening its offer with niche credit cards. 

Antipodean business owners can now pay for their commercial equipment and vehicles through their American Express card. The programme is a global first for American Express within the commercial equipment finance space, and Macquarie Leasing is the only institution in the market to accept plastic for new commercial vehicle and equipment finance repayments.

As part of the offer, Macquarie Leasing will accept American Express for monthly payments for new commercial hire purchase, chattel mortgage and finance lease agreements. Macquarie Leasing also has the ability to source cars and insurance products on behalf of American Express card members.

"This is a great opportunity for business owners to diversify the way they pay for their business equipment needs - from car to medical equipment finance arrangements. In addition, business owners can benefit from a convenient method of payment with the added advantage of being able to extend their cash flow,” said Joanne Sully, vice president, global merchant services, American Express.

"Business owners can now use their American Express Card to pay for commercial vehicle and equipment finance repayments and in doing so, will earn more Membership Reward points - which can ultimately be put back into their business,” she added.

"Macquarie Leasing is delighted that we can assist Australian businesses by expanding the range of vehicle and equipment financing solutions available in the market, a result of our continued commitment to SMEs,” said Andrew Sidery, head of Macquarie Leasing specialist sales.

It is the latest example of a bank offering a sweetener to new and existing clients through its credit cards - in what could be a worrying trend, given the fresh memories of the global credit crunch. Global banks invested heavily in Asia-Pacific during the boom years, and many are finding their cost to income ratios are growing uncomfortably high. In a bid to grow new assets, several are seeking to expand their loans pool, offering privileges to loyal customers through credit cards. 

US lender Citi's Hong Kong division this week sealed a partnership with lifestyle concierge firm Ten Group, available to all of its clients with an Ultima card. The Citibank Ultima Card is strictly by invitation. Customers normally will have at least HK$8 million($1 million) AUM with the bank or HK$3 million annual income. Finance charge is 2.33 per cent per month. APR is 31.89 per cent (retail spending); 33.61 per cent(cash advance).

Citi also separately announced it had gained approval to offer its credit cards in China, as one of the first foreign lenders to get the green light.

In December UK-listed Standard Chartered’s Islamic banking arm rolled out Islamic financial services, including credit cards, for its clients in the Middle East.

Meanwhile India’s HDFC Bank also in December launched premium credit cards targeting female clients.

The new card, Solitaire Premium, has a credit limit of nearly $10,000. The lender said it wants to increase its credit card clientele by 4 million over the next two years – or 10 million credit cards.

The bank is currently the biggest issuer of credit cards in the country and has around six million credit card customers, 1.5 million of whom are women.