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Poland: Credit And Debit Cards Take Off

Warsaw, 28 February 1997 (RFE/RL) -- Like millions of consumers from Berlin to Vladivostok, Jurek and Danuta Zaporski, a Polish couple in their late 40s, have lived most of their lives paying for everything from clothes to cars and houses with cash.

But a few years ago, the Zaporskis became financial trendsetters -- they were among the first Poles to get credit cards, in one of the first post-Communist countries where credit cards are catching on.

Since credit cards first began to be issued here six years ago, Poles have been applying for the new financial instrument in record numbers. Visa International, the dominant force in the Polish market, is experiencing growth of nearly 200 percent a year in cardholders. This follows a whopping 800 percent growth in Hungary last year.

Malgorzata O'Shaughnessy, manager for Visa International in Poland, told RFE/RL correspondent in Warsaw that the company now expects one million Poles to have Visa cards by the end of next year and 10 million -- or every fourth Pole -- to have one by the year 2005.

It's part of a Polish boom in all types of consumer credits in the past year or so. Consumer credit has mushroomed by 90 percent as more type of loans become available. Young people can now buy their first car on credit with little or no down payment. At the end of last year, one Polish bank even offered loans in the range of $500 for Christmas shopping, with the credit to be repaid within two or three months.

But in contrast with the type of cards widely used in the West -- where banks allow customers to charge expenditures up to a certain limit without offering any collateral -- few of the cards in use in Central and Eastern Europe are true credit cards. More commonly they're secured by customers' deposits in the bank, or are actually debit cards, where the amount charged is taken out of the customer's bank account.

Banks in the former Communist countries have moved cautiously in issuing true credit cards because consumer loans are such a novelty in these long-time cash economies. Banks were not sure that consumers could handle credit responsibly.

Renata Gawkowska, spokeswoman for PolCard, Poland's domestic charge card, says bluntly: "In our country, a card is a kind of gadget or toy. I don't know if people are ready to properly use a real credit card because you have to be very careful, and as you know, we are not a very rich society."

Jurek and Danuta Zaporski, owners of the Mozaika Cafe in downtown Warsaw, know the credit card experience from both sides. They began accepting American Express, MasterCard and Visa at their cafe in 1991 and took out a Visa card of their own in 1994 -- like many Poles, in order to make life easier on a trip to Western Europe.

Jurek is quick to praise the convenience of a card, which in his case was secured by $2,500 in a special bank account.

Cards are safer, he says, than carrying a lot of cash. And on a car trip from Poland to Spain, he and his wife were able to avoid changing lots of currencies by putting meals, gasolines and souvenirs along the way on their card instead of using cash.

However, Jurek has never used his card in his own country, even though every day there are more outlets in Poland that accept them.

In the glitzy Beverly Hills boutique -- where the pale peach marble walls and soft lighting live up to the luxury of its namesake -- the manager says that her clientele of nouveaux riche Russians and Poles are increasingly using cards for purchases of more than $3,000 in Italian designer fashions at a time.

But Jurek says his domestic purchases are usually so small that he pays cash. He explains: "I would feel a bit ashamed to pay 10 zlotys ($3) with a card. People come into our cafe and they pay for a cup of coffee with a card and I think that's a bit silly."

This is part three in a four-part series about the transition of the Czech Republic and Poland to market economies.