Credit Cards Not For Everyone

Plastic Fantastic?

The income levels required to receive a credit card are on the rise, as are penalties for those who do not use cards often enough. For many Poles credit cards used to be the simplest method of borrowing money from a bank. Low-level (PLN 2,000-3,000) cards were readily available even to individuals with net monthly incomes as low as PLN 500. Times have changed, however. According to a study conducted by Open Finance, six financial institutions have recently made the decision to raise the income thresholds allowing one to be eligible for a credit card.

“Some banks no longer accept the income statements of new clients/employees; they now require one to have an employer’s stamp,” says an Open Finance representative. The new restrictions are a consequence of credit card debt which is increasing at an alarming rate. Most people faced with financial difficulties decide to use their credit card funds to the limit as a temporary solution but then refuse to pay off the money. The total value of unpaid credit card debt exceeded PLN 1.5 billion in September 2009. Banks nowadays need assurance that all the credit cards they issue will bring a profit. In order for that to happen clients must use their credit cards in shops regularly so that the bank can receive commission. Therefore, banks have recently started imposing high fees on clients who seldom use their cards. Millenium charges PLN 65 per annum, Citi Handlowy PLN 60. Open Finance has decided that the best credit card on the market today is the one issued by Citi Handlowy as it offers the most attractive rebate programme and free insurance on fraudulent transactions. Citi Handlowy is not overly demanding when it comes to income requirements either. Alior Bank cards are ranked second by Open Finance, followed by Polbank EFG and BZ WBK.
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Mom Not Afraid To Work

Working Mother

They learn foreign languages, how to use a computer, they also take vocational training courses. Programmes designed especially for mothers are becoming increasingly more common and are often funded in part by the EU. Among women in the 25-34 age group who are unemployed, approximately 75 percent are taking care of their children. The “Mother at work” study conducted last year by a group of sociologists from Lódź University revealed that women are concerned that it will be too difficult for them to meet job requirements and find ample time to care for their children at the same time. They are also worried about the potential difficulties of finding a job resulting from their lack of knowledge and at the same time feel that finding a baby sitter would not be an easy task. Women who wish to return to work should seek financial aid from the European Union as there are increasingly more programmes designed especially for them.

The Wrocław “Job in vogue” project includes a session with a psychologist and a meeting with a job counsellor. Another programme in Wrocław offers workshops that focus on confidence-building for job interviews, vocational training and computer courses. The “Women zone” project which began in Warsaw in January has quickly attracted much interest. Unemployed mothers are the target, as are women over 45 years of age. Participants will have the opportunity to take English and computer courses, they can also expect plenty of guidance and advice from job consultants and psychologists. The organisers have also promised to reimburse all babysitter costs. One of the coordinators of the programme explains that “the schedule is 9am to 5pm, Monday to Friday. This set-up aims to prepare women for a regular workday, make their transition back to work easier and ensure that they will have enough time to put their newly-acquired skills to use while they are still taking part in the course”. Global Training Centre has the most experience in assisting women in making the successful return to work – their project was put into operation back in 2006. The company’s statistics show that over 60 percent of those who participated do return to work, some even decide to set up their own businesses. When asked about the most valuable thing the course has given them, most women mention “the huge boost in confidence”.
Metro

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Debtors And Debt Collectors

Avoiding a Knock on the Door

If you are facing financial difficulties, you are not the only one – around 1.5 million Poles are in a similar predicament. Overdue cash loan instalments alone amount to a dozen or so billion złoty and are steadily increasing. Doing nothing is the worst way out. Banks rarely forget about debts, sooner or later they will demand that a loan be repaid. However, there are ways to handle the situation:

1) Before a bank loses patience there is plenty of time for negotiation. The period between the moment you receive the first phone call or text message reminding you of unpaid loans to the day the financial institution transfers the issue over to a recovery company is normally a few months long. At the end of that period you will be notified of the value of the unpaid amounts, reminder costs, interest and recovery costs. If there is no reaction on the part of the client the bank will place him/her on the black list of debtors.
2) Black lists of debtors are kept by economic information offices, called BIGs. These are privately-owned companies that collect data on individuals who default on all sorts of payments and later sell that information to companies and private persons – anyone who intends to find out whether their business partners are trustworthy. Those who have been placed on a black list usually encounter problems when applying for loans, trying to rent an apartment or purchase a house – their applications are generally rejected.
3) Once you are off the black list and BIGs are controlled by the government, black lists are monitored and verified on a regular basis to ensure that all new entries are justified. Thus, once you have settled all your financial obligations, a BIG is required to remove you from the list upon prior verification.
4) The bank sells your debt if the banks’ efforts to collect the bad debt do not yield satisfactory results. The debt is sold to a company that specialises in debt recovery. This is the solution most often used by banks when it comes to cash loans, especially those that are unsecured. By taking advantage of this method, the bank will manage to recover only a small fraction of the debt’s total value but will be satisfied nonetheless. It will then offset its losses by imposing a loan interest increase for all its other clients.
5) If a recovery company fails to convince you to repay the debt, the matter goes to court. If the court settles in favour of the debt collectors, you will have no other solution but to start paying off the money or else deal with a bailiff whose visit should be best avoided.
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Post-graduate Studies – Profit Or Problem?

Good Idea or Not?

Employees are eager to further their education. However, is this profitable for employers? According to a recent CBOS opinion poll, Poles like to take additional courses and generally expand their education. More than 51% of those polled are not satisfied with the level of education they have attained while approximately 48% are considering improving their professional qualifications. The more educated one is, the more certain he/she is that investing in education should be considered a priority. Employers’ requirements unquestionably have an impact on that approach. It is very difficult to make predictions as to when the financial crisis will come to an end. Companies need a workforce that can easily adapt to the demanding market conditions of today. What extra qualities does an employee bring to a company after competing post-graduate studies? He/she is undoubtedly more competent and knowledgeable.

“These are the most important non-tangible values for a company. If employees constantly improve their qualifications, the company is more likely to prosper and become more competitive which ultimately leads to improved financial results,” says Thierry Iovane, president of CIMA (Chartered Institute of Management Accountants). Post-graduate studies are in great demand both on the Polish labour market and abroad. Managers have much respect for workers who, after obtaining a university degree in a certain field, make the decision to work in a field that is different and complete related post-graduate studies. “These individuals are able to gather a great deal of knowledge in their field of expertise, gain access to the relevant literature and in case of problems know about sources of information where solutions can be found,” says an employment consultant. “While studying, they make acquaintances with people from similar business backgrounds which results in an exchange of ideas which, in turn, leads to improved performance at work.” Managers who are considering extra post-graduate courses for their employees have to be aware of the often substantial costs involved. Taking advantage of studies or courses that are in part financed by the European Social Fund often proves to be a sensible and cost-effective solution. One of the few disadvantages of having well-educated employees is that they may become overconfident, demand unreasonable salary raises or even leave the company. On the whole though, the advantages clearly outweigh the drawbacks.
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Tough Times For Smokers

No Smoking

On Thursday January 21, the health committee adopted an amendment to the law regarding the effects of cigarette smoking. The amendment aims to tighten the ban imposed on smoking in public places. If it becomes law, smoking a pipe or a cigarette in restaurants or pubs will no longer be permitted. The ban will also affect all educational and health facilities, among them hospitals. Similarly, smoking will not be allowed on beaches and on public transport, including trains as the committee deleted a previous entry which allowed train companies to permit smoking in selected cars on their long-haul routes. The smoking ban has also been extended to taxi cabs while members of parliament decided to vote against an initial proposal to add private vehicles to the list. The amendment was introduced by PiS members, it also has the backing of PSL. It has been approved by the government even though the first reaction of Ewa Kopacz, the health minister, was negative. Under the law, the advertising and promotion of tobacco products will also be forbidden. So far twelve EU countries have introduced a complete ban on smoking in the workplace, in bars and in restaurants.
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Poczta To Be Sent Packing

In Need of New Priorities

Private postal companies have already taken many of the orders previously handled by Poczta Polska (The Polish Post Office). They are presently intending to provide services also for banks, energy companies and government offices. As a result, Poczta Polska will soon be forced to close down a number of its branches, shorten opening hours and lay off some of its staff. One of these private postal companies has recently signed a PLN 60 million deal with a major telecommunications company, however, they are refusing to disclose the name of their new client. Poczta Polska currently enjoys a (legal) monopoly on the delivery of parcels whose weight does not exceed 50 grams. Its competitors have found a way to bypass this rule – they simply affix either small metal plates or little sacs filled with sand to the envelopes. However,  Poczta Polska’s monopoly will expire in 2013.

“Poczta  will have to face competition not only from Poland but also from abroad. Most likely from Germany, France and Austria,” says the CEO of InPost. Both domestic and foreign companies are planning to concentrate primarily on large cities as going nationwide does not bring as much profit. Companies that have already terminated their agreements with Poczta or are expected to do so in the near future are not dissatisfied with the quality of service but rather with the costs – they are simply too high. A spokesman of the TP Group comments that “private companies offer rates that are often even 20 percent lower than those of Poczta; our savings amount to a few million złoty yearly”. Besides, TP, Netia and mBank have recently decided to part company with Poczta in favour of private companies in order to reduce costs. The management of Poczta, after losing the courier market earlier to private postal companies, seems genuinely concerned about their mounting financial losses and the urgent need to make changes, but the company has not been able to find a permanent solution to the problems it has been facing.
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First Pure Party

No Alcohol, We

‘Pure Party’ in Freta Gallery – great music in a ‘pure’ atmosphere. If you are longing for a party without cigarette smoke and endless supplies of alcohol then we have good news for you. On Saturday, for the first time in Poland, there will be a ‘Pure Party’ in Warsaw. If you are looking to have a good time and all you really need is great music and the company of interesting people where drinking and smoking are not mandatory then ‘Pure Party’ is for you. There is no place for fun artificially created by cigarettes and alcohol, which many people are normally unable to relax without. You are likely to meet loners, globetrotters as well as connoisseurs as ‘Pure Party’ is not only about music – everyone will have the opportunity to taste dishes from around the world with one restriction: no meat will be served. There will be plenty of vegetarian dishes and some for vegans also. A circus-like performance with African instruments playing in the background will start things off. Fans of music of all kinds will find something for themselves during the party as oriental music, reggae, latino and even tango will be heard throughout the event. The highlight will be a mixture of exotic trance and ‘primeval’ energy. Instead of alcohol, participants will have to settle for freshly-squeezed fruit juices or chai, a combination of tea, milk, herbs and spices. Marcin Garczyński, one of the organisers believes that “the event we are preparing will generate plenty of genuine joy and will not lead to hangovers and gaps in one’s memory”. ‘Pure Party’ starts at 20:00 on Saturday, tickets are still available but are selling fast.
Metro

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Okęcie Closing Down

Airport Standstill

Protests continue after the announcement that Okęcie airport will close down for three September weekends. Travel offices are considering intervening via the Ministry of Infrastructure. On Tuesday, January 19, Okęcie airport authorities were going to meet with airline and travel agency representatives to try to convince them that they made the right decision. The largest airport in the country will be temporarily out of service as a result of repairs to the shorter runway. There are to be no take-offs or landings on September 04-05, 11-12 and 18-19.

The proposal has prompted strong, mostly negative reactions from airlines. “If the plan is carried out, it will inconvenience us immensely. We hope that the Okęcie management does not go ahead with it. One weekend was sufficient for a similar maintenance project in Frankfurt,” said LOT’s spokesman. Carriers have yet to decide on a contingency plan if Okęcie does close down. Naturally a number of flights would need to be transferred to other cities while others are likely to be cancelled. Travel agencies are joining airlines in the protest as September is still holiday season. September is when many Poles holiday in the south of Europe and northern Africa. “If we fail to persuade Okęcie officials to change their decision we will file a complaint with the Infrastructure Ministry,” says an Itaka employee. Airport representatives maintain that the repairs are unavoidable and must be carried out promptly. “The Office of Civil Aviation is urging us to go ahead with this thorough overhaul, we cannot postpone it any longer. We did notify the airlines concerned of our plans last year in September, that is twelve months in advance,” says an Okęcie official.
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Moving From One Bank to Another

Saving Made Easy

Your bank does not meet your expectations. Change it! Transferring your account to another bank is now easy as 1, 2, 3. The European Commission has recently examined the bank services market and reached the conclusion that competition is not fierce enough. Therefore it has established a rule that requires banks to assist their customers with changing their account. All that customers will have to do is put their signature on an agreement while the banks do the rest. The ‘new’ bank will then ask the client for a list of transfers and permanent orders and in the meantime notify his/her employer, the revenue office and the Social Security Office (ZUS) of the changes. The bank will also need to ensure that the previous account is closed and the funds are transferred to the new account – all within a 7-day period. The only question is whether bank customers will actually decide to take advantage of this new service. If we were to judge by opinion polls we can expect long queues. According to a Homo Homini poll, roughly 1/3 of all bank customers would gladly transfer their accounts to another bank if they could do it in a single visit to a local branch. Over 20% of those polled admitted the services their banks offered fell short of their expectations but the prospect of having to deal with endless formalities discourages them.

The four steps to a new bank account:
1) Decide what is most important for you. See what banks have to offer and choose the option that meets your needs;
2) Visit a branch, provide them with your phone number and then a consultant will contact you and set up an appointment;
3) Sign a new account agreement and authorise your bank to close your old bank account and make sure all the money is transferred from the previous account;
4) Submit an application on the basis of which the bank will inform all the relevant offices about the changes.
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Shopping Problems of The Wealthy

A Pole's Best Friend?

“In Poland, there is no infrastructure in place for spending money,” says Jerzy Mazgaj, the founder of Paradise Group, a company that has created a luxury nest at Three Crosses Square in Warsaw, boasting up-market brands such as Zegna, Burberry, Armani and also Rolex. “When it comes to luxury of the highest order, I honestly wish I could find Graff diamonds, Patek Philippe watches or Hermes accessories in Poland,” complains a businessman. “To make matters worse, no Polish restaurant has ever been awarded a star in the famous Michelin guide,” he adds. According to this Kraków businessman, the main problem that is making it extremely difficult for luxury brands to enter the Polish market is a clear lack of prestigious locations. Despite the fact that Nowy Świat is ranked by Cushman and Wakefield as one of the most expensive streets in the world, high-class boutiques there are flanked by the likes of a Społem grocery store, a milk bar and a closed-down shop – hardly exclusive company.

Sunreef Yachts, a manufacturer of luxury boats and the like did receive an order from a Pole but the EUR 2.5 million catamaran is unlikely to dock in a Polish port because it simply would not fit in next to the boats in their shabby surroundings. The entrance of up-market brands onto Eastern European markets is dependant upon the growth rate of salaries in those countries, an area where Poland has a lot of catching up to do. The number of potential clients, that is of those with an above-average income is very small in Poland therefore in order to purchase a top-notch watch or a designer suit we will have to wait until the markets where those brands are already present become saturated. “Certain companies have been talking about coming to Poland for quite some time but most decide against it in the end,” says Mazgaj. Grandturismo Italia owned by Sobiesław Zasada was supposed to open a Ferrari salon in the centre of Warsaw at the end of 2009 but the opening was eventually postponed until spring 2010. Experts are calling it a risky venture though as the California model is likely to cost about EUR 40,000 more than it does in Germany. What is more, the state of Polish roads does very little to encourage such purchases.
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