Only existing customers with good credit backgrounds are eligible for the government's 10-billion-baht refinancing programme, and applicants will be restricted from obtaining any new credit cards for one year after being accepted.
As well, the combined amount of credit card debt must not be more than five times the debtor's monthly salary or 300,000 baht, whichever is less.
The three participating state-owned banks _ Krung Thai Bank, the Government Savings Bank and the Islamic Bank of Thailand _ will charge annual interest of only 10% to refinance the debt, half the maximum 20% normally charged for credit-card loans.
The deadline for applications is Aug 31.
Customers holding multiple cards and having a combined balance of more than 300,000 baht can apply to refinance the card account with the highest outstanding amount, in which case they can still use the remaining cards.
Of course, doing this will only partly reduce overall card debt and the holder will still be able to add to the total over the next 12 months, so it is questionable whether the burden will be relieved to a significant extent.
Those pooling their entire debt burden upon entering the programme cannot use credit cards for one year, but they will be debt-free if they can complete their payments within the given period.
The National Credit Bureau (NCB) reports 5,212,299 individual credit card accounts in Thailand, with 372,931 cardholders having eight or more accounts each. Of the total accounts, 4,201,438 are classified as normal active loans, 934,629 are non-performing loans, and 76,232 are being monitored due to difficulties.
Bankers say the refinancing scheme is designed to transform credit card debt into a personal loan, which is subject to lower interest.
"But even if you refinance your credit card debt, you must still maintain a good payment record," said one banker. "Otherwise, your bad record will appear in the NCB's database and hurt you when applying for loans in the future."
Financial discipline is very important, especially to those applying for new credit cards after finishing the refinancing scheme.
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