Tue, 09 Nov 1999

Amex launches first credit card in RI

JAKARTA (JP): American Express (Amex) launched its first credit card on Monday amid signs of recovery in the country's economy.

The vice president and country manager of Travel Related Services (TRS) in Indonesia, Atul Mathur, said the Account Linked Blue Credit Card offered holders a credit limit equivalent to the amount of their deposits placed in Amex savings accounts.

"The deposit funds will give cardholders an interest rate of 13 percent per year," Mathur said.

He said the credit card would target a new, broader consumer base compared to Amex's charge card.

"This consumer segment is new to Amex Indonesia," he said.

Amex formerly operated only its charge card business in the country, with cardholders exclusively from the upper market segment.

Charge cards require the holder to make full payments upon billing at the end of the month or incur penalties. The credit card allows the holder to make incremental payments at the end of the following month and bear the incurring interest rate after the month of purchase.

Mathur said he was confident about the country's economic recovery and its future business prospects.

"Our confidence is reflected in our launching of the new product."

He noted early indications of political stability and economic growth, which he said were crucial to consumer spending.

"The card business depends on political stability and economic growth. If people are more confident about the future, they will spend more."

Mathur said consumer spending of Amex charge cardholders in the country consistently increased each month over the last two months to three months.

"Looking at the current growth, we predict that this quarter would make 20 percent growth compared to the last quarter," he said.

Amex, which began operations in Indonesia in 1976, is a global diversified travel and financial services company founded in 1850 in the United States. Its services include charge and credit cards and traveler's checks. (udi)