Increasing Trend of Using Credit Cards in India
The economy is booming and purchasing power is increasing by leaps and bounds. India is young again and the young are driving the economy harder. It is the age of malls, shopping complexes, multiplexes, buying cars, expensive watches, owning a house and most importantly flashing a string of “Credit Cards”. The young India loves to own a credit card. The Gen-Next feels privileged to own a credit card. It is trendy by all means!
If you sit back and think, you would realize that the increasing trend to use credit cards in India is more need driven rather than just being a fashion statement. Today India is constantly on the move. People have become more mobile and it is becoming riskier to carry cash every day. On the other hand, expenses are on the rise as well thus in order to bridge the gap between the purchases and inability to carry cash, the modern Indian generation is opting to use credit cards. It is much simpler to pay with the plastic money while on the move and make physical payments at the end of each month. Paying actual cash limits the purchasing capacities.
Using credit cards is lot safer than carrying large amounts of cash. If you are one of the top executives in a company, you are more likely to stay in better hotels and travel by air. Thus, it makes more sense to pay by your credit card and present the bill as well as the copy of credit card statement for reimbursements. A credit card has become a convenience to the travelers and business people.
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Apart from the business needs, credit cards have made it convenient for people to buy now and pay later. If you loved the music system at any of the stores in the mall, credit cards enable you to purchase your favorite consumer durable right now and plan your EMIs. This means you no longer save each month to buy your favorite product and no more lingering reluctance to make a purchase.
Statistics show that there were about 22 million credit cards in India in January 2007. The number of credit cards has more than doubled in past three years. You can attribute these impressive growth rates to increasing consumerism in India which is further expected to boost owing to the intensifying competition between credit card companies and more lucrative offers in the market each day. Moreover, apart from issuing of credit cards, the credit card transactions have also doubled from the FY 2003–4 to 2005–6. The current growth in the credit card industry is estimated to be around 28% which is further predicted to be on an increase. Moreover, the industry experts believe the increase in the transactions should be around 20% each year.
With figures like these, one can be sure that the increase of credit cards in India has come of age. With payment structures continuously becoming easier each day and nearly every bank expanding its network, making payments on your cards has become a lot easier. The competition in industry has further fuelled the usage of credit cards in India. The banks are cutting down on interest rates and over head charges owing to the increasing competition. This means consumer becomes the king. One can also opt for specialized credit cards such as cards for women, for small business owners, for students, etc. at low costs. In the end, the consumer rules the market and credit card companies expect to see better business in coming times.
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