Nigeria is a cash-based economy with minimal credit card usage. Only few financial institutions offer credit card services. The grave situation of the Nigeria credit cards market is characterized by large scale online money frauds and credit card scams.
Nigeria Credit Cards Usage
Nigeria credit cards are not a popular means of transaction in the country. An individual cannot make payments through credit cards except in some selected super malls and upscale hotels or restaurants. Extremely low credit card usage in Nigeria is attributed to the infamous 419 credit card scam. Also, popular as Nigerian Letter, the 419 scammers persuade individuals to make credit card advances in lieu of heavy gains. Snopes.com, an online resource that validates/debunks rumors in the American culture, confirmed the loss of over $100 million from the US alone. The scam created an air of suspicion in the Nigerian market. As merchants began to doubt the realization of credit card payments, cash became the most popular form of monetary transactions.
Nigeria Credit Cards: Issuers
Not many banks issue credit cards in Nigeria for the fear of potential financial losses. Also, American Express has no domestic operations in the country, so an individual has to choose between MasterCard and Visa. Nigerian banks adhere to strict regulations for issuing credit cards. Individuals with financial soundness and an excellent credit history can get credit cards from their respective banks. To obtain a credit card in Nigeria, an individual can apply with the following banking institutions in the country:
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First Bank
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Ecobank
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Standard Trust bank
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Zenith Bank
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Union Bank of Nigeria
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Intercontinental Bank
In an effort to fortify credit facilities to citizens, Nigerian banks offer foreign-currency dominated credit cards. Simply put, they are prepaid credit cards that require a domiciliary account, mostly in US dollars, to ensure payments. Ecobank is one of the pioneers to introduce Naira-dominated credit cards in the market. These credit cards require a savings or checking account instead of a domiciliary account for approval.
As the Nigerian Letter is a widespread phenomenon, credit card users should take special precautions in card usage. By keeping a list of their card transactions and not replying to unsolicited mails or phone calls, one can prevent falling into the debt trap.