In order to increase market share of bank cards, banks have been issuing debit cards regardless of whether customers use them or not, which has caused waste.

According to the State Bank of Vietnam (SBV)’s Payment Department, Việt Nam has a total of more than 145 million cards in circulation, of which 113.07 million are domestic cards and 32.81 million are international cards. However, many of the cards are not being used. It is estimated some 55 million are junk cards.

The number of 'junk cards' is significant as the race to issue cards among banks has been very fierce. 

One woman in Hà Nội admitted that she did not remember how many cards she had activated, but now she only used two cards and accounts.

All banks have tried to increase market share of credit cards as investment in this segment brings big profits because interest rates are higher than regular loans. Card fees, such as annual fees, cash withdrawal fees and overdue debt fines, bring a large and very stable source of revenue for banks.

Banks have rushed to issue cards to expand market share, regardless of whether customers need to use them or not. Banks have continuously offered preferential policies to attract and retain customers to use credit cards, such as cashback at shopping locations, cash rewards for high spending, free suitcases and exemption from annual fees for customers in the following year if their spending reaches the required levels.

Meanwhile, customers do not hesitate to activate cards as this can be done online easily. This is one of the reasons for banks’ rampant card issue, which has caused waste and many other consequences.

Phạm Anh Tuấn, Director of the SBV’s Payment Department, admitted that in recent times, many banks had been quite easy going in activating credit cards.

Despite the indiscriminate junk cards, there is currently no legal regulation to cancel cards that are not being used. 

Currently, each bank has its own regulations on handling junk cards. At Agribank, an account and card, which does not have enough minimum balance of VNĐ50,000 for individual customer and VNĐ1 million for institutional customer, and inactive within 12 months, will be put into sleeping account mode. Then, Agribank will close the account and card if the account and card is still inactive in the next 36 months.

However, banks can only close accounts and cards with a balance of zero đồng. For accounts that still have even VNĐ1, banks cannot close. In fact, there are many such accounts.

Therefore, industry insiders proposed the management authorities should issue legal regulations on closing junk cards. — VNS