Credit Card

Why Most Nigerians Will Not Get A Credit Card (Find Out Why)

Have you ever wondered why financial institutions don’t give credit cards to Nigerians? Nigeria is having a very large population of youths in the country. This population growth is a great opportunity for financial institutions to give out credit cards to qualified individuals and make a lot of money from that. In other western countries, the credit card is a product that makes a lot of money for financial institutions, but you’ll still wonder why it is not easily accessible to customers in Nigeria. Keep reading to know why.

Credit card is not common or popular in a country like Nigeria but it doesn’t mean that the service is not available. A lot of Nigerians are not aware of credit cards and how they work because it is not rampant among Nigerians. Only a few numbers of individuals are aware of the difference between a credit and a debit card.

The debit card and the credit card all play the same role when it comes to shopping online or in a physical shopping mall and they are usually referred to as payment cards.

Even though they all perform the function as a tool for shopping online, or a means of making payments, there are some major differences between both cards and they do not serve the same purpose.

The debit card which is most popular among Nigerians can only be used when the card is funded by the customer or account holder but in the case of a credit card, the customer or account holder will have to pay for any transaction that is being initiated on the account at the end of every month.

A credit card has some advantages over a debit card which makes it a special card if I may call it that way. The card user or account holder does not necessarily have to worry about funding the card or account linked to the card before using it. What the bank does is to credit the account with some certain amount of money the card owner has agreed with the bank or financial institution. The card user can then go ahead and make use of the money in the account.

At the end of the month, the card owner is expected to pay the debt before a new amount will then be credited into his/ her bank account.

A lot of financial experts have criticized credit cards on different occasions and this has given the service a bad press when it comes to personal finances. But some will tell you it is an excellent financial tool or product that can come in handy on many occasions.

As much as having a “Magic Card” that gives you money to spend even when you don’t have a dime may sound amazing, in a short period it can create a negative impression about you and affect your credit score if you fail to pay off your debt at the agreed date. 

I’m not going to focus on why I think the credit card is right or not right for you. But I’m going to focus on the major reasons why I think financial institutions may not offer credit cards to most Nigerian customers.

Why Most Nigerians Will Not Get A Credit Card

What Is A Credit Card?

A Credit Card is a plastic card or metallic form card that is issued by a bank, financial institution, or company. The card allows users to borrow funds to pay for goods and services with merchants that accept card payments on their websites or app. With this credit card, the user will have to pay back the borrowed money on the card, and other applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time.

3 Reasons Why Most Nigerians Will Not Get a Credit Card

Here are some major reasons why most financial institutions such as the banks in Nigeria may not offer credit cards to Nigerian customers. Most of these are meant to protect the bank from bad debtors. Below are reasons why your application for a credit card as a Nigerian may not be approved by the bank.
  • Bad Credit Record
  • Not Enough Financial Records
  • Low Credit Score

Bad Credit Record

A lot of Nigerians are familiar with the word credit score due to the rise in the increase of digital loans in Nigeria.
The credit score which is usually a 3-digit number that starts from 300-850 is a mathematical calculation or algorithm that indicates the level of risk associated with granting credit or loan to a prospective borrower or customer. When the number is lower, it is an indication that there is a high risk of giving a loan to such a customer. On the other hand, if the number is higher, then it is a clear indication that the borrower has a good record with taking loans and there is every probability that the borrower will eventually pay off his or her debt.
These scores are being ranked as excellent, good, average, or poor. Most banks do not offer a credit cards to Nigerians because a lot of Nigerians are bad debtors when it comes to taking digital loans. As a result of this, a lot of money lending platforms have been reporting Nigerians to the credit bureau. 
When the bank goes through your credit score and discovers that it is below the required credit score for a credit card application, they will not offer that individual credit card as a risk management process. 

Not Enough Financial Records

When you’re not having enough transaction history or record to justify your financial capabilities to pay your debt, a financial institution will not offer you a credit card.
The banks need individuals with proven records of finance when it comes to the inflow and outflow of money in an account. 
Banks in Nigeria don’t offer credit cards to their Nigerian customers because most of the applicants don’t have a solid record showing that they are capable of paying their debts.

Low Credit Score

As I have mentioned before, the credit score plays a vital role when it comes to getting a credit card from the bank. When you have a low credit score, don’t even think about approaching the bank for a credit card because they will decline your application. This is one of the major challenges being faced by Nigerians when it comes to getting a credit card from the bank.

Which Bank Offers a Credit Card?

According to Mainbanking. Standard chartered bank offers two major types of credit cards to Nigerians. These cards are standard chartered Visa Gold Card and Visa Platinum Credit Card. You can apply for a Credit Card from Standard Chartered bank. 

Conclusion/Final Verdict

The credit card can be a great financial support system that can help you whenever you need cash. It comes with different financial benefits that make it advantageous over a debit card.
For you to enjoy the service of a credit card, you must be disciplined when it comes to money, and paying off debts.
It is very important to understand how a credit card works. According to Master card, there are a good number chances that almost everyone will use a credit card throughout their life which is why it is important to to learn about credits, credit cards and how they work in the financial market.
Credit can be a very useful tool in managing your everyday finances, providing a flexible payment  option that can make your financial life easier.  Responsible use of credit cards is also an important step toward establishing a good credit history, which will give you financial advantages now and in the future. Good credit history leads to a positive credit score, which is typically used by banks and other businesses to determine if you’re responsible with money.
Trying to track accounts owned by an individual was a major challenge in the banking industry of Nigeria some decades ago but with the introduction of the Bank Verification Number (BVN) which is a central identification code that financial institutions can use to access all bank accounts owned by an individual applying for a credit card. we should expect to see a lot of people having access to credit cards in the future. 
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