Seminar report on " business credit card instant "

A credit card is a type of retail transaction settlement and credit system, named after small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer loans the consumers money rather than having the money removed from an account. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size that contains identification information such as signature or picture, and authorizes the person named on it to charge purchases or services to his account – charges for which he will be billed periodically. Today the information on the card is read by automated teller machines (ATM’s), store readers, bank and Internet computers.

Credit cards are gaining around in India too. More and more banks are encouraging their people to go in for credit cards. Besides the various freebies and rewards doled out, customers feel it very convenient to carry a plastic card rather than bundles of currency.

The expected growth rate of credit card business in India is 25-30%. With the advent of globalization and privatization, the concept of credit cards is gaining popularity. Customers no longer have to carry huge amount in their wallet. Most of the bill payments including utility payments can he taken care by credit cards. Further in India at least people perceive the card as a status symbol.

A credit card, as the name suggests, gives you credit – obviously for a charge. The days of credit one gets could range from 20- 50, days depending on the date when one

made the purchase. You can choose to pay your entire dues at one go, or stagger them after paying the minimum amount due every month. Besides this, it entitles the member to plethora of benefits like travel discounts, discount on retail loans.


Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange the forerunner of banknotes – was established in the 14th century.

Christopher Thornton, who offered furniture that could be paid off weekly, placed the first advertisement for credit in 1730.

From the 18th century until the early part of 20th, tallymen sold clothes in return for small weekly payments. They were called “tallymen” because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments.

According to Encyclopedia Britannia, the use of credit cards originated in the United States during the 1920’s, when individual companies, such as hotel chains and oil companies, began issuing them to customers for purchases made at those businesses. This use increased significantly after World War II. In the 1920s, a shopper’s plate – a “buy now, pay later” system – was introduced in the USA. It could only be used in the shops, which issued it.

Dinners club, Inc, introduced the first universal credit card one that could be used at a variety of stores and businesses in 1950. With this system, the credit card company charged cardholders an annual fee and billed fee and billed them on a monthly or yearly basis. In 1951, Dinners club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age. The American Express

Company established another major universal card “Don’t leave home without it” in 1958.

Later came the bank credit card system. Under this plan, the bank credits the account of the merchants as sales slips are received (this means merchants are paid quickly something they love) and assembles charges to be billed the cardholder at the end of the billing period. The card holder, in turn, pays the bank either the entire balances or in monthly installments with interest (sometimes called carrying charges).

The first national bank plan was bank of America, which was started on a statewide basis in 1959 by the Bank of America in California. This system was licensed in other states starting in 1966, and was renamed Visa in 1976.

Other major bankcards followed, including master card formerly master charge. In order to offer expanded services, such as meals and lodging, many smaller banks that earlier offered credit cards on a local or regional basis formed relationships with large national or international banks.


1.     Size: A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size.
2.     Front Side: Front side contains following information:

              (a) Printed
(i)                Name and Logo of the Issuing Bank
Name and Logo of Co-branding Merchant Establishment, if any.
(ii)             Name and Logo of member affiliate (e.g. Visa, Master, etc.)
(iii)           Photo of the cardholder / his family (optional feature)
(iv)           Picture (Any deity or scene of holder’s choice) (Optional Feature)

(b) Embossed:
(i)                Period of Validity as Valid from Date and Valid Through Date.
(ii)             Name of the Card Holder.
(iii)           Card Number

             The numbers found on credit cards have a particular structure, and share                              a common numbering scheme.
             The card number’s prefix, called the Bank Identification Number, is the sequence of digits at the beginning of the number that determine the bank to which a credit card number belongs. This is the first six digits for MasterCard and Visa cards. Worldwide there is a uniform numbering arrangements for bank and VISA /Master Identification. The last ten digits are the individual account number.

(3) Back side: - Back side contains following information:
       A) The stripe on the back of a credit card i.e. a magnetic stripe, often called a   magstripe. (CVV1 is embedded in this stripe)  The magstripe is made up of tiny iron based magnetic particles in a plastic like film. Each particle is really a tiny bar magnet about 20 millions of an inch long. The magstripe on the back of the card is very similar to a piece of cassette tape.

     B) Credit Card Number in Print
     C) The card Verification Value or Code (CVV or CVC) 2. CVV2 is always the       final group of numbers printed on the back signature panel of the card.
   D) Contact Numbers of the issuing bank.
   E) Space for holder’s signature.
   F) Terms and disclaimer clause of the bank.  
Financial Features of Credit Card

1.     ANNUAL MEMBERSHIP FEE: Most members are expected to pay annual membership fee to their issuing authority. This is towards maintenance of the card account by the bank or ‘service charges’. These are waived off to some customers who transact significant value through their credit card. Banker’s earning is by interest income on credit cards. More the usage of card more the income to the bank. Hence bank encourages more use of car & when is achieved, bank waves off annual fees. This is a reward for using the card.

2.     MINIMUM PAYMENT: All the issuers insist upon minimum payment by the card holder for every billing cycle. This is usually 5 % of merchant transaction bill. Full amount is to be paid for EMI’s of the loan. It is payable within 20 days of billing. This is free credit period i.e. no interest is payable. Amount unpaid and rolled over to the next billing cycle attracts interest rate as decided by the bank. 

3.     RATE OF INTEREST (Annual Percentage Rate (APR): Rate of interest for the amount rolled over to the next billing cycle is usually high. In India it is around 2.5% to 3% per month. Hence, it’s very costly to rollover such amount. For the cardholder, it is much cheaper to on time.

4.     EMI Conversions: When outstanding amount on the card is high or purchase is for high value (for e.g. TV set, laptop etc.) then it is not possible to pay full amount within one billing cycle. Carrying forward is expensive as interest rate is prohibitive. Banks offer to convert such purchases / outstanding to Equated Monthly Installments (EMIs). Rate of interest to these schemes is relatively lower (around 16% per annum) but still high in absolute terms.

5.     BALANCE TRANSFER: Bankers encourage cardholders to transfer their outstanding dues to other issuer’s card to their bank card. This transfer is again at a concession rate of interest.

6.     PERSONAL LOAN: Issuers extend personal loan facility to the cardholders. It may be noted that EMI or balance transfer or personal loan are all in the form of loan only. A cheque favoring the cardholder or nominated beneficiary is issued by the bank in all these cases. EMI payable is charged to the card in monthly billing statements.

7.     INSURANCE: Most bankers (issuers) insure the life of cardholders at concessional rate and assign insurance proceeds towards outstanding bills on the card. In case of eventuality, insurance proceeds meet bankers outstanding dues & remainder amount is paid to the heirs of the card holder

8.     ATM: Card holder users can withdraw cash from ATM’s with pre-specified limits


A credit card is a form of borrowing that often involves charges. Credit terms and conditions affect your overall cost. So it’s wise to compare terms and fees before customers agree to open a credit or charge card account. The following are some important terms to consider that generally must be disclosed in credit cards applications or in solicitations that require no application.

1.     Credit Card
Credit cards provide convenience of purchasing goods and paying for them later. The outstanding balance of the credit card account can be paid either full after receiving a monthly statement, or by making payments over time. A credit card account is a form of a loan, and therefore the credit card holder must eventually pay all charges made on the credit card.

2.     Credit Card Issuer
Credit card issuer in an organization that is issuing credit cards and provides credit lines to individuals or organizations. In most cases these issuers are financial institutions such as banks or credit unions. Department stores, gasoline companies and other organizations also issue credit cards.

3.     Credit Limit
Credit limit is the largest amount of outstanding balance that the credit card issuer authorizes customers, to carry on credit card. For  e.g. if credit limit is 50,000 you are allowed to use the 50,000 as a revolving line of credit by using credit purchases and withdrawals, the maximum amount of money customer could borrow on credit card would be, in this case, 50,000.

4.     Annual Percentage Rate
The APR is a measure of the cost of credit, expressed as a yearly rate. It also must be disclosed before customer become obligated on the account statements.

5.     Annual Fees
Most issuers charge annual membership 0participation fees.  They often vary from organization to organization and credit cards to credit card. Generally a card with higher annual fee enjoys more benefits like higher credit card limit, higher accident insurance cover, accessibility to airport lounges, travel discounts etc.

6.     Transaction Fees and Other Fees
 Transaction fee and other fees are fees that are charged by credit card issuers for cash advances from Automated Teller Machines (ATM) or a bank, cash advance cheques, and returned cash advances cheques, late payments, overdrawing on credit limit or in some cases monthly fees charged by some issuers.

7.     Additional Card
Additional card is a card that can be issued to a person other than the primary credit card holder. Additional cards may be issued for spouse, children or anybody else customers want to use existing line of credit. An additional cardholder is not responsible for any charges made on the credit card even though his or her name appears on the credit card. This responsibility remains with the primary cardholders and a consigner, if any. However in case of a joint account all card holders are responsible for all charges.

8.     Available Balance -
Available credit is the unused amount of your total authorized credit line. For e.g., if your total authorized credit line is 3000 and your current balance is 400, your available credit is 2600.

9.     Balance Transfer
Balance transfer is a transfer of balance from one credit card or a loan to another credit card. Many credit card issuers offer introductory interest rates that are much lower than the standard interest rates.

10.            Cash Advance
Cash can be withdrawn from available credit card account. Typically using credit card at an automated teller machine or a bank does this.

11.            Consigner
Consigner may be family member or a friend who is wiling to act as a guarantor of the potential credit card debt that may be an accumulated by the credit card holder.

12.            Due Date
A credit card issuer should receive payment on or before the due date that is stated on monthly statement. The due date is the date which the credit card issuer should receive the payment, not the date by which should pay credit card bill.

13.            Late Charges
In order to avoid any late charges, make sure that at least the minimum due amount, as started on monthly statement, reaches the credit issuer by the due date.  Too many late payments recorded on credit report could make it harder for customers to qualify for any kind of loan or credit card in the future.

14. Outstanding Balance
Outstanding balance is the amount of money that customer owe to the credit card issuer. The outstanding balance constantly changes as customer purchases, cash advances, and interest charges and any other charges are added to the previous balance.  For e.g. if your balance is Rs. 800, and you make a payment of RS.600, new outstanding balance is RS.200.

15. Secured Credit Card
Secured credit card can help establish or re-establish credit history. A security deposit is required before a credit card issuer will issue a secured credit card.

    16. Unsecured Credit Card
Unsecured credit card does not require any cash deposit or any other collateral before the credit card is issued. Only credit history and your financial resources available back the unsecured credit card.

   17. Add-On-Card
The supplementary card/add- on card fee is the payable per additional card that a member may request for his close family member like father, brother, sister or spouse.


An example of the front of a typical credit card:
1.     Issuing Bank logo
2.     EMV chip
3.     Hologram
4.     Cardholder
5.     Card brand logo
6.     Expiry Date
7.     Cardholder’s name
An example of reverse side of typical credit card:

1.     Magnetic strip
2.     Signature strip
3.     Card security code

A user issued credit card after an account has been approved by credit provider (often a general bank, but sometimes a captive bank created to issue a particular brand of credit card, such as wells Fargo or American Express or Centurion Bank), with which the user will be able to make purchases from merchants accepting that credit card up to a pre-established credit limit.

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates their consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a PIN. Also, many merchants now accept the verbal authorization via telephone and electronic authorization using the internet, kwon as a customer not present transaction.   

Electronic verification system allows merchants to verify that the card is valid and the credit cards customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card terminal or Point of Sale (POS) system with a communication link to merchant’s acquiring bank. Data from the card is obtained using from a chip on the card; the later system is commonly known as chip and PIN, but is more technically an EMV card.

Other variations of verification system are used by eCommerce merchants to determine if the user’s account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of cardholder.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect otherwise, the cardholder must pay a defined minimum proportion of bill by due date or may choose to pay higher amount up to the entire amount owed. The credit provider charges on the amount owed (typically at much higher rate than most other forms of debt). Some financial institution can arrange for automatic payments to be deducted from the user’s accounts.

Credit card issuers usually waive interest charges if the balance is paid in full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

For merchants, a credit card transaction is often more secure than other forms of payments, such as cheques, because the issuing bank commits to pay the merchant the moment the transaction is verified. The bank charges a commission (discount fee), to the merchant for this service and there may be a certain delay before the agreed payment is received by the merchants. In addition, a merchant may be penalized or have their ability to receive payment using the credit card restricted if there are too many cancellations or reversals of charges.

Merchant receives money directly in his account from the bank if he is networked through electronic swipe machines. If he is takes impression of card then he has to send slip to the bank for payments.  


       Following are the parties involved in credit card chain:
1)    Issuer: Banks or finance organizations are issuers of the cards.

2)    Cardholder: Card is in possession of cardholder and he is expected to use it for purchases, etc.

3)    Merchant Establishment: Such as shops, malls, restaurants, hotels, railways, airlines accept payments by card.  They get authorization the cardholder at the time of payment. An actual payment comes to them from issuer.

4)    Payment to Networking Organization: Visa and Master card are popular umbrella organization in payment.


Benefits of Credit Card to Cardholders, Issuers and Payment networks are as follows:

To Cardholders:
1.     Convenience: It is very convenient to carry a card compared to cash. Its acceptance is better than cheques. Risk of theft is less and if stolen, stoppage and recovery is better than cash and cheques.It is even more convenient for unplanned purchases and needs as one may not carry enough cash every time.
2.     Spot credit: As and when needed, credit is available. It’s pre-negotiated credit limit which can be availed of whenever desired. Credit is free of interest till first time immediate billing cycle. This improves purchasing power.
3.     Easy Payments: Minimum balance payment for each bill is a must. Over and above this it is Cardholder’s ability and willingness to pay for each card bill.
4.     ATM cash: Cash can be withdrawn from ATMs as and when required. This is very important feature in countries like India where cash usage is more as compared to other modes of payments. Thus cards improve liquidity and credibility of the cardholder.
5.     Rewards point and Discounts: There are additional benefits provided by issuer for usage of card. Reward points can be converted to discounts and gifts as per catalogue of issuer.
6.     Privileges: Access to VIP lounges at the airport and star hotels is an additional privilege for the cardholder.
7.     Other Loans: Bankers provide personal loans, car loans, etc. with some priority and ease if cardholder’s payment history is good.

To Issuers:
1. Profit: Annual Percentage Rate (APR) is high on credit cards as these are high risk unsecured loans. If cards are issued with proper diligence then defaults is less and bankers’ profits in card business are high.
2. New Customers: New customers get hooked to bankers as cardholders. It is easy to sell them other products such as housing loans, auto loans and bancassurance products later on.
3. Brand Image: Card issuing bank create better brand image in minds of its customer as compared to other banks.
4. ATM sharing Fees: Bankers who establish their own ATMs get sharing fees from other banks if other banks customer uses their ATM.This is additional income from them.

To Payment Networks (VISA\Maser card):

1.     Profit: These networks charge fees for their usage of name and network. Hence it’s a profit for them.
2.     Brand Image: With every new user, brand grows. With every new merchant establishment accepting brand, global image scores points.


 To cardholders:
1. Cost: Cost of card is high. Annual fee, APR, penalties, ATM usages charges, lost card replacement charges is significant.
2. Overspending: As purchasing power is not limited to cash, people tend to spend more. It’s a machine to provoke consumerism in the society. it in a favors of capitalism and against socialism.
3. Habitual borrowing: with popularity of cards, stigma on loans as negative feature of life has vanished. Borrowing and enjoying life is no longer looked down

Upon. Unknowingly everyone has become a habitual borrower.incidentially no religious book approves of this style of living.

To issuers:
1. Risk: Cards are unsecured loans. Recovery mechanism does not have any recourse on assets. Legal backup thus is limited. Establishing a recovery system within these limitations is a high cost affair.
2. Servicing cost: cards are technology oriented. Cards are costly .issuance process, billing and payment processing is a laborious and costly affair.
3. Utilization Dependency: Bank earns well on cards if cards are used frequently by the holders. Indian psyche is not very tuned to careless use. Cards which are not used much are in fact cost burden on the banks.
4. Payment Habits: APR Interest earnings are significant provided part of billed amount is rolled over to the next billing. If many customers pay full bill every time, there is no APR earning for banks.
To payment networks:
Payment networks do share some responsibility and risks. Even if member bank defaults or delays, these networks have to own up timely payments to merchant establishments so as to maintain their brand image.


A debit card operates like cash or a cheque. When customer makes a purchase with a debit card, the money is immediately withdrawn from customer bank account. With a debit card, customers are only allowed to spend the money that is in customer bank account. Customer do not incur interest, but customer may have to pay customer bank” transaction fees or pay interest if customer have to use the overdraft protection.

A credit card allows purchasing now and paying later. You have a certain amount of time from when you make the purchase to when you receive the bill. With a credit card, you are allowed to spend up to the limit pre-determined by the bank. Interest rates and fees vary, but the majority of card issuers do not charge interest when you pay the full balance each month.


CIBIL is a repository of information, which contains the credit history of commercial and consumer borrowers. CIBIL provides this information to its Members in the form of credit information reports.

CIBIL's equity was held by State Bank of India, Housing Development Finance Corporation Limited, Dun & Bradstreet Information Services India Private Limited and Trans Union International Inc. The shareholding pattern was in the proportion of 40:40:10:10 respectively.

CIBIL is a composite Credit Bureau, which caters to both commercial and consumer segments. The Consumer Credit Bureau covers credit availed by individuals while the Commercial Credit Bureau covers credit availed by non-individuals such as partnership firms, proprietary concerns, private and public limited companies, etc.

Members of CIBIL
Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies, Housing Finance Companies and Credit Card Companies are Members of CIBIL.

Functioning of CIBIL

For credit grantors to gain a complete picture of the payment history of a credit applicant, they must be able to gain access to the applicant's complete credit record that may be spread over different institutions. CIBIL collects commercial and consumer credit-related data and collates such data to create and distribute credit reports to Members.

CIBIL primarily gets information from its Members only and at a subsequent stage will supplement it with public domain information in order to create a truly comprehensive snapshot of an entity’s financial track record.

A Credit Information Report (CIR) is a factual record of a borrower's credit payment history compiled from information received from different credit grantors. Its purpose is to help credit grantors make informed lending decisions - quickly and objectively.

The CIR only provides available factual credit information and does not provide any opinion, indication or comment pertaining to whether credit should or should not be granted. The credit grantors who have received an application for credit will make the credit decision. CIBIL does not grant or deny credit

Benefits to borrower from CIBIL
CIBIL's CIRs are aimed at helping credit grantors make fast and objective lending decisions. This will contribute to a more competitive credit marketplace among Credit Grantors. With a Bureau in place, responsible customers can expect faster and more competitive services at better terms from the Credit Grantors.

Final RBI guidelines on credit cards
The credit card user in India has faced several problems, including bills not being received on time, wrong bills and, worst of all, receiving unsolicited cards. But all this may soon become history.

Reserve Bank of India has issued guidelines to banks and non-banking finance companies (NBFCs) on credit card operations, which touch upon issues such as credit limit, interest rate, wrong billing, sharing of credit information and fair practices, and code of conduct for the issuers.

The guidelines state that each bank and NBFC must have a Fair Practices Code for credit card operations, which should be widely displayed on their Web sites before November 30.

As per the guidelines, framed by the RBI Working Group on Regulatory Mechanism for Cards, banks and NBFCs issuing credit cards will now have to ensure that customers get at least 15 days to make payment before charging interest for delayed payment.

In the case of a wrong bill, the card issuer will have to explain and provide the customer with documentary evidence within 60 days.

The issuers will have to give at least one-month notice before hiking any charge. Also, if a customer wishes to surrender his credit card on account of change in charges, the bank will not charge him extra for such closure.

Banks should also maintain a Do Not Call Registry (DNCR) containing phone numbers of customers as well as non-customers who have informed the bank they do not wish to receive unsolicited marketing calls for credit card products. The DNCR should be set up within two months, the guidelines said.

In case a bank issues an unsolicited card without the consent of the recipient, the bank should reverse the charge and also pay a penalty amounting to twice the value of the charges reversed.

The monthly statement sent to customers must carry information such as the annualized percentage rates, annual fee and late payment charges and the method of calculation of rates.

RBI has also asked banks or NBFCs who outsource credit operations to ensure confidentiality of customers' records. Banks can also formulate their own code of conduct for direct sales agents or use the code formulated by the Indian Banks' Association and display these on their Web site.
In case the credit card is issued to persons without independent financial means such as students, the liability will be that of the principal cardholder.

With regard to multiple credit cards, the issuer should assess the limit on the basis of self-declaration or credit information, the guidelines said.
Banks must also publicize their grievance redressal machinery and mention the name and contact number of the officer concerned.

RBI said it has the right to impose any penalty on a bank or NBFC for violation of any of these guidelines.


  The proliferation of cards in the market would simply clutter the process of        choosing.
The following are the important features, which should be kept in mind before selecting the credit card.
·        Generally, a card with a higher annual fee enjoys more benefits like higher credit limit, higher accident insurance cover, accessibility to airport lounges, travel discounts etc.
·        If customers are interested in buying add-on cards for customer’s children, spouse or friend, ask for the add-on card fee.
·        If customers were the sorts who forgets to pay on time, or likes to celebrate and live off credit, interest rate would be permanent importance. Most credit cards companies charge anywhere between 2% to 3% per month.
·        A global card can be used for paying expenses in foreign currency just like customer uses a credit card to pay in rupees if the customer is an overseas traveler.
·        A partnership between a card issuer and the non-profit, social or lifestyle association is what results in an affinity card. This is for providing financial rewards to the group or association. E.g., Citibank women’s card donates a percentage of transaction value made through the card to the WWF fund for its environmental conservation activities.
·        If a customer is loyal to one brand, he will go for co-branded cards. For e.g.Bank of India and Taj group of hotels etc.
·        Check out if the bank has any ATMs near house or work place. This surely helps in times of emergency. If customers are going to withdraw cash frequently, better watch out for this cost.
·        A 24-hour help line service from the card company helps the cardholders during the non-banking hours. Reporting the theft, checking of available credit limit and other enquiries can be made by the cardholder round the clock.


   Following are the some important tips for protecting credit card.

Ø Sign card-as soon as customer received it.
Ø When customer use card at an ATM, enter your PIN in such way that no one can easily memorize key strokes.
Ø Don’t live receipt behind at the ATM.
Ø Customer PIN and account NO. From a discarded receipt could make customer vulnerable to credit card frauds, also through out credit card statement, receipt, or carbons without first shredding them.
Ø Never give credit card number over the telephone unless customer initiated the call.
Ø Ignore any credit card offer that require customer to spend money up-front or fails to disclose the identity of the credit card issuer.
Ø Make certain customer to get card back after make purchase and make sure tat customer personally rip of any voided or cancelled sales slips.
Ø Always keep a list of credit card, credit card number and toll free number in case customer card is stolen or lost.


There is no way to know if customers qualify for a credit card without doing some research. Some of the basic things that lenders look for include.
Ø Good payment record:-
 If customer pay bills on time, customer will score major points with lenders. If customers have lot of late payments, this can hurt customers chances of getting a card, and if the lender decides to issue a card, it’s probably going to have a higher interest rate.

Ø Control of Debt load
Lenders generally want to see that customers are good credit risk and those customers aren’t living beyond customer means. Experts say that non-mortgage credit payments each month should not exceed more than 10% to 15% of take home pay.

Ø Signs of stability and responsibility
 Lenders perceive things such as longevity in home and job (at least 2 years) as signs of stability. Having a respected profession doesn’t hurt either.

Ø Lack of credit enquiries
This one is little strange. Whenever customers apply for a credit card, the lenders pulls credit report from one or major bureaus as part of the approval process. Each time a report is pulled, it’s marked as an inquiry and stay on credit bureau report for two years. Lenders perceive several inquiries on report as indications that customers are scrambling for loans and may consider a poor credit risk. So, in order to beat this system, don’t allow every credit card issuer speak with to pull report.

Ø Lack of available or unsured credit
Did customer know that customer don’t use and have a zero balance on could hurt your credit? The rationale here, experts say, is that if customers
have all this available credit lying around, customers could run it up at any time. Get rid of the cards don’t use. Be sure to ask the credit –reporting bureaus to remove the discarded cards from report, nothing that customer not the creditor closed the account.

 Once customers qualify for a card, or several cards, there’s always the chance that customers will end up spending more than you’ve got.


There are about 22 million credit cards in India (as on January 2007). And the total value of such transactions almost doubled between 2003-04 and 2005-06, to around Rs 33,900 crore. The latest available data, which covers the first 10 months of 2006-07, indicate continues robust growth, in the number of credit cards increasing at 28% year-on-year. Over the same period, the value of credit card transaction grew by 20%. But the number of credit cards in India-22-million-is tiny for a country with a population exceeding 1.1 billion. Since many people have multiple cards, the number of card holder is much smaller than the number of cards in circulation. Credit card issuers in India have plenty of room to expand their customer bases aggressively over the next few years.

Number Of Transactions
(in millions)
Value Of Transactions
(Rs Crore)
April 2005-March 2006
April 2006-January 2007

ICICI Bank credit card to enter 50 more cities
Source: - Economic Times, 27 July, 2007

NEW DELHI: The country's largest private sector lender ICICI Bank is planning to expand its credit card business to another 50 cities and expects 20-
25 per cent increase in business during the current fiscal. 

"We already have presence in 125 cities and plans to spread our footprint to another 50 cities this year," ICICI Bank Head (credit cards product group)

Sachin Khandelwal told media.

The wide presence will not only grow the card business but will act as a loyalty
tool for retaining customers too, he said.

Besides, it helps in attracting new customers for the bank, he added.

By far, ICICI is the market leader in the credit card business with 85 lakh credit
card floating in the market against the total market size of 2.3 crore. 

With almost 35 per cent market share, the bank expects 20-25 per cent growth in the card business during the year, he said. 

At present, it is offering over half a dozen cards such as Gold, Titanium,

Platinum, Silver, True value Star. Besides, there are many co-branded cards. 

During early this month, the bank unveiled 'Visa Signature card' for high

networth individual with a joining fee of Rs 25,000 and an annual subscription thereafter of Rs 2,500. 

Talking about the features of the card, Khandelwal said, this would be available only to a select few and would be priced, unlike most other cards on offer today.

Gold passe, platinum in for banks
                                    Source: - Economic times, 16 Aug,2007

NEW DELHI: Banks seem to be seeing more colour in the silver-white of platinum than the bright yellowness of gold when it comes to credit cards, as being shown by their growing focus on the premium segment of customers for
Credit lending instruments.

The shift comes amid credit card companies seeking to tap the growing population of affluent people who, according to industry estimates, spend about
Rs 3,60,000 a year, 10 times more than the average consumer in the country. 

There are about 15 lakh people under this category in the country and the

segment is increasing rapidly at a rate of 25 per cent a year.

Till a few months back banks like Citigroup, Deutsche Bank and American Express were offering high-end credit cards under the "platinum" and "signature" series, but today nearly all major players are offering such instruments that come with larger credit limits as compared to the lower-end
silver and gold cards. 

Typically, silver and gold cards offer credit limits of Rs 20,000-60,000, whereas the cap on platinum and signature cards goes into lakhs. American Express India Vice President (Engagement Brand and Lending) Amit Dutta said the bank was targeting high-value customers for its platinum cards.

Generally, such cardholders are international travellers in the age group of 35-45 years and include high salaried executives, Dutta said. Emerging affluent consumers earn between Rs 20-25 lakh or upwards in a year, he added. Deutsche Bank, which which forayed into the premium card segment last year,
 has already issued 10,000 platinum cards.

Realising the potential of the segment, SBI Card, a joint venture between PSU giant State Bank of India and GE Money, also forayed into the platinum card
segment last week.

It is offering a competitive 3.5 per cent waiver surcharge on spending made abroad in foreign currencies and hopes to distribute about one lakh cards in next 12 months. Unlike its foreign competitors, SBI Card does not involve any

subscription fee or annual charges. 

Country's biggest credit card issuer ICICI Bank, last month, unveiled 'Visa Signature card' for high networth individual with a joining fee of Rs 25,000 and
subscription fee thereafter of Rs 2,500.

The card would be made available only to a select few, said ICICI Bank Head (Cedit Cards Product Group) Sachin Khandelwal. Besides, it is loaded with exclusive bouquet offer valued in excess of Rs 50,000, including a Tag Heuer watch or travel vouchers for destination of choice and a Rs 3-crore air travel
insurance cover.


Surely credit cards are all set to make a define impact on the lifestyle of the people. A boom in credit cards business is quite expected. Merchants establishments should be enrolled in large number to offer variety to card users in the choice of shop to shop. About 40,000 establishments in India accept credit cards of one firm or other. True some merchants establishments do not align with credit card business. They hopefully feel enough is enough. Even some feel that credit card sales are nuisance. Credit card benefit only customer and not to us.

Incremental sales definitely results and that merchant establishment stand to gain. Accepting credit cards is a competitive tool. Merchant firms should be forward looking and some forward to accept cards. Regarding the credit card holding population in India their size should be about 11million present.


The project has been done with the help of the following materials.


Gordon and Natrajan

1 comment:

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