Why Trinidad’s Banks Are Cutting Foreign Currency Limits on Credit Cards

Trinidad and Tobago’s major commercial banks Republic Bank Limited, First Citizens, and Scotiabank have significantly reduced foreign currency spending limits on credit cards and introduced tighter issuance policies. These actions are in response to mounting pressures on the country’s foreign exchange system, driven by surging consumer demand for international e-commerce, shrinking reserves, and a widening gap between FX supply and demand.

Source - Central Bank of Trinidad and Tobago

According to the Central Bank of Trinidad and Tobago (CBTT), the FX market experienced a shortfall of approximately US$1.36 bil in 2024. Authorized dealers sold US$5.9 bil to the public while purchasing just US$4.5 bil. To bridge the gap, the CBTT was forced to intervene with US$1.36 billion in foreign currency support with higher CC usage amplifying the issue.

A key finding from the CBTT’s Annual Economic Survey 2024 was that credit cards now represent the largest source of FX outflows. Credit card transactions accounted for 44.4% of all foreign exchange sales above US$20,000 far surpassing traditional commercial uses such as retail and distribution (16.5%), energy companies (15.8%), and automobile dealers (5.8 %).

Source - Central Bank of Trinidad and Tobago

This means that everyday purchases from Amazon orders and Netflix subscriptions to airline tickets, are driving nearly half of all large scale FX transactions. Each swipe of a credit card for international use requires banks to immediately convert TTDs into USDs, creating real-time pressure on national reserves.

This shift in consumption behavior is having a visible impact on the country’s external buffers. Net official reserves declined from over US$10 bill in 2015 to US$5.6 bil by the end of 2024. Over the same period, Trinidad and Tobago’s import cover fell from more than 12 months to just over 6mths near the minimum threshold advised by international financial institutions for economic safety.

Source - Central Bank of Trinidad and Tobago

Republic Bank (RFHL) has been the most explicit in responding to this pressure. In December 2024, the bank reduced the foreign currency limit for new credit card applicants from US$5,000 to US$2,000 and stopped issuing new cards to existing customers who already possess a credit product. The bank’s 2024 annual report also revealed a US$20 mil decline in credit card-related fee income as transaction volumes fell under the new restrictions.

First Citizens (FCGFG) reported rising costs associated with credit cards, with related expenses increasing to TT$161.8 million in 2024. The bank also launched new digital safeguards for online purchases, including one-time password authentication, to better manage card-based e-commerce. Scotiabank (SBTT) noted growth in its credit card portfolio but acknowledged a fall in "net other income"a category that includes credit card revenue suggesting pressure on profitability due to FX control measures.

The CBTT, for its part, has repeatedly acknowledged the strain. While consumer credit rose by 12.1% yoy in 2024, credit card debt, which includes international spending, was a significant contributor to that growth. Despite this rise in consumer borrowing, the central bank noted tight liquidity conditions and limited FX supply, prompting a continued need for direct intervention in the market.

This is not merely a banking matter. It is a national economic challenge. Trinidad and Tobago’s foreign currency system is under sustained stress, with energy revenues down, non-energy exports stagnant, and consumption patterns increasingly globalized. With the country’s reserve cushion thinning, policymakers and financial institutions are left with little choice but to curb FX outflows where they are most intense.

Restricting foreign currency credit card usage is one of the few tools available to slow the drain. The moves by Republic Bank, First Citizens, and Scotiabank are not designed to punish consumers but to preserve the stability of the currency and the health of the financial system. Until FX inflows improve or consumption patterns shift, these restrictions are likely to remain in place. What feels like a personal inconvenience is, in reality, a systemic defense mechanism. The FX crunch is real, and credit cards have become the frontline.