PERCEPTION TOWARDS CREDIT CARDS IN INDIA

Abstract

A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. There is now a flood of Indian banks offering credit cards to the potential customers. Multinational banks operating in India have also joined the bandwagon with high voltage advertising and seemingly competitive reward programmes for loyal credit card users. Banks income from credit cards can be divided mainly into four components namely annual fee, interchange charge, revolving fee (interest charged for revolving credit) and other fees. Indian credit card market is growing at almost 30 to 40 per cent annually and the number of credit cards in circulation is twenty seven and half million as reported by credit card issuers.