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ORIGIN The credit card had its beginning in an embarrassing incident that took place in the early 1950s in America. The story goes that Mr. McNamara; a New York businessman took his friends out to dinner. At the end of meal he discovered that he had forgotten his wallet at home, the proprietor was kind enough to allow him a later settlement of bill. As McNamara stepped out of the restaurant he had the brainwave for the introduction of credit cards - system of availing instant credit upon confirming the identity of cardholder. Thus was born the Diners Club Cards, the pioneer o f t o d a y s multibillion-dollar plastic money business. Diners Club adopted a promising approach by recruiting various hotels and restaurants to act as member establishments for accepting the cards. Not only did these establishments pay a commission on members purchases but the members also paid an annual subscription fee. Diners Club vetted its members for credit worthiness and guaranteed payment to participating establishment. T h u s w a s b or n t h e f i r s t T r a v e l a n d E n t e r t a i n m e n t C a r d . I t w a s followed by American Express, which is now a dominant force in the Travel and Entertainment cards industry, and by 1959 by CarteBlanche, after many vicissitudes is now a part of City


Bank Empire Together With Diners Club. In the present time American Express leads the travel and entertainment (T&E) card industry. The next great leap-forward came from Bank of America, which in other banks. Such cardholders could use their card 1966 offered to license its successful blue, white and gold Bank America card to at any accepting merchant establishments around the globe. Later in1977 all the national and international Bank America licenses were pulled together under the single name of Visa. Not to be outdone, a rival group of American Banks came together in 1966 under the name of Interbank, later renamed Master Charge and later still Master Card. Ever since Master Card and Visa and their affiliates have carved the world credit card market. In the 1980s credit card concept was launched in India through the D i n e r s C l u b c a r d , a n d s o o n , w i t h i n a c o u p l e o f m o n t h s b o t h Visa and Master card entered into the Indian market.

What is a Credit Card? Credit Cards - its credit to you! A Credit Card is referred to as 'plastic money'. Carrying a l o t o f c a s h o n y o u c a n b e c u m b er s o m e , r i s k y a n d s o m e t i m e s , you run short of it, just when you most need it. (Remember the S AL E aty o u r f a v o r i t e r e a d y m a d e s s t o r e ? ) . A C r e d i t c a r d i s t h e


s m a r t solution to these problems. It is a convenient and safe alternative for cash. Besides, it says things about you. Most people associate a c r e d i t card with a prestige, which it most certainly bestows on you, but m o r e i m p o r t a n t l y , i t s a y s t h a t y o u h a v e t a k e n t h e o n u s o f being responsible - to be extended credit! So, when you get y o u r s e l f a card, remember that, because your bank does! Before i go any further, why not become familiar with the various terms and jargons used by the credit card industry. Credit Card A credit card is a financial instrument, which can be used more than once to borrow money or buy products and services on credit. Banks, retail stores and other businesses generally issue these. Credit limit The maximum amount of charges a cardholder may apply to the account. Annual fee A b a n k c h a r g e f o r u s e o f a c r e d i t c a r d l e v i e d e a c h year, which ranges depending upon the type of card one possesses. Banks usually take an initial fixed amount in the first year and theta lower amount as yearly renewal fees. Revolving Line Of Credit


- A n a g r e e m e n t t o l e n d a s p e c i f i c a m o u n t t o a b o r r o w er and to allow that amount to be borrowed again once it has b e e n r e p a i d . M o s t c r e d i t c a r d s of f er r e v o l v i n g credit.

Personal Identification Number (PIN) - A s a s e c u r i t y m e a s u r e , some cards require a number to be punched into a keypad before a transaction can be completed. The cardholder can usually change the number. Teaser Rate - Often called the introductory rate, it is the below-m ar k e t i n t e r e s t r a t e o f f e r e d t o e n t i c e c u s t o m e r s t o s w i t c h cr e d i t cards. Joint Credit - I s s u e d t o a c o u p l e b a s e d o n b o t h of t h e i r a s s e t s , incomes and credit reports. It generally results in a higher credit limit, but makes both parties responsible for repaying the debt.


T h e c r e d i t c a r d i n d u s t r y i n I n di a h a s r e g i s t e r e d a n e n c o u r a g i n g growth in recent times, but the usage pattern of credit cards remains p o i n t o f c o n c 0 e r n , t h o s e i n t h e i n d u s t r y s a y .


T h e r e h a s b e e n a seven-fold increase, with the number of cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in India is growing at a brisk annual rate of 30 per cent and is expected to grow at a similar rate in the coming years. While issuing the cards may seem to be easy, the challenge for the banks lies in being able to manage their portfolios by keeping the delinquency levels at the lowest and customer satisfaction levels at the highest. Customer satisfaction is the key to success. You want customers to be happy with the products and services you provide. I f t h e y f e e l t h e y h a v e r e c e i v e d g o o d v a l u e for their money, y o u r business will prosper. Getting your customers to tell you whats good about your business, and where you need improvement, helps you to be sure that your business measures up to their expectations. Apart from attracting potential card users, customer retention is alsoo n e o f t h e m o s t i m p o r t a n t f a c t o r s i n f l u e n c i n g a c a r d i s s u e r s success. ----. With the influx of new financial institutions in the c a r d m a r k e t , p e o p l e h a v e s t a r t e d u s i n g c a r d s o n a m o r e r e g u l a r b a s i s . T h e l e v e l o f s e r v i c e s pr o v i d e d b y t h e s e o r g a n i z a t i o n s i s increasing day by day. In order to ensure that the existing customers stay loyal, Organization has to ascertain whether its existing customers are satisfied with its current service offerings. This research has tried to study the satisfaction levels of a sample of 100 credit card holders. These respondents each hold credit cards, which may be of different kinds




Confining our study to the geographical limits of Delhi, we chose sample of 100 people 50 cardholders and 50 non-card users, using thep r o b a b i l i t y s a m p l i n g t e c h n i q u e w h e r e e v e r y i n d i v i d u a l f u l f i lling theabove criteria had an equal chance of being selected f o r t h e s u r v e y . Following are some of the facts that were revealed through the survey. Sources and Method of Data Collection The data on the present study will be collected by the investigator himself. It's customary to distinguish data between primary and secondary. Collection of Primary Data:


The collection of primary data done with the help of personal meet with the Managing Director and Supervisory and Official Staff after Securitization of records maintained. A personal survey and surprise check are prompt to be carried o u t t o a s c e r t a i n t h e f a c t o n t h e b a s i s o f s u r v e y o f c r e d i t c a r d a t personal interest.

Collection of Secondary Data: News papers, Press Media Magazines Telecommunication






Study is the one of the important parts of any study. Following are the objectives of the study: To find the scope of the credit cards industry in India. To know the customer awareness regarding credit cards. To analysis the benefits of credit cards.



To know how it is beneficial to manage the cash risk. To understand the market potential of credit card in Delhi.


The study on Credit card- increases the volume of profit of this industry. We have considered geographical Unit of Delhi. It in we analysis the comparison of different credit cards and their detail reports their branches and values.





T h e c r e d i t c a r d i n d u s t r y i n I n di a h a s r e g i s t e r e d a n e n c o u r a g i n g growth in recent times, but the usage pattern of credit cards remains a p o i n t o f c o n c e r n , t h o s e i n t h e i n d u s t r y s a y . S e v e n y e a r s b a c k , India had a base of around five lakh credit cards. There has been as even-fold increase, with the number of cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in India is growing at a brisk annual rate of 30 per cent and i s e x p e c t e d t o g r o w a t a s i m i l a r r a t e i n t h e c o m i n g


y e a r s . T h i s fortifies the view that conservative purchasing ideas are giving way to the big in-thing. But it is the usability that raises doubts. According to a survey by the Credit Card & Management Consultancy (CCMC), 71 per cent of first time credit card a p p l i c a n t s i n t h e c o u n t r y h a v e e x pr e s s e d t h e n e e d f o r a d v i c e o n appropriate card selection despite the plethora of cards available in the market. Through this survey it has come to realize a long felt need of potential and existing cardholders for advice on suitable selection of a credit card. The whole idea behind the introduction of the credit cards was to increase the purchasing capacity of the cardholder. With this in mind, the foreign banks launched a credit card blitzkrieg on the Indian customer. The innovations have already begun to show their effect. T h e Standard Chartered Bank has seen its credit card base shoot up after the launch of its Global Rupee Card in March last year. It has seen the fresh issuance of global card increase by more than one lakh, and the bank now has a base of more than half a billion. B u t t h e r e a l c h a l l e n g e f o r t h e b a n k s i s t o m a k e t h e h o l d e r s p e n d more on the card. Going by estimates, India has a long way to be anywhere near the matured markets. The markets like the United States and England have an average annual card spend of 1,300 and3,600 dollars respectively. T h e credit card players will have to think about simplifying the foreign exchange transactions. When one uses the card, it is entirely his responsibility to make sure that exchange controls have been complied with.



The banks that issue the cards have made it abundantly clear that one has to look out for him. It is upon him to find out the facts of regulatory life. The real point of worry is the spending on the credit cards. According to estimates, the average card spending in India is even less than that in Indonesia. Those in the credit card business say that per capita credit card spending in India is about five hundred dollars (Rs 21,500), whereas in Indonesia, it is about 678 dollars (Rs 29,154). At present there are over a dozen players in the credit card market in India, and the facts the foreign banks are clearly the leaders. The leaders will surely be identified by the innovations for the card users. But the alarm has been raised for the banks by the figures that show that while the average usage in Malaysia is 27 times annually, in I n d i a i t i s o n l y 1 1 t i m e s . S o m e o f t h e k e y f a c t o r s i m p a c t i n g t h e cards business in India are limited credit, wide geographical spread, limited telecommunication infrastructure and emerging regulatory c o n t r o l s . T h e o t h e r p l a y e r s f e e l t h a t t h e c a r d a c c e p t a n c e b a s e i n India has to be widened. Suggestions include credit card usage at petrol pumps and railway bookings. They also point out that though the cards business has been in the country for long, but even today the insurance premium cannot be paid by card. Though LIC is talking about the introduction of this facility to customers, but its turning into reality may take t i m e . There is talk of widening the card business with new features, but the present scenario does not paint a positive picture, with many loopholes remaining to be plugged. Of the twenty million taxpayers in India, more


than ten per cent of them are cardholders. Those in the industry point out that this figures not bad, considering the fact that; the cards business is still in its initial stages. However, the players feel that the business has not reached an optimum level to say that they are making money. Event h e l a r g e s t p l a y e r i n t h e I n d i a n m a r k e t d o e s n o t s t i l l h a v e t h e economies to make the card business really p r o f i t a b l e i n I n d i a , despite the fact that it has more than one million credit card holders. Less than two per cent of private consumption spending in India is done on cards. While issuing the cards may seem to be easy, the challenge for the banks lies in being able to manage their portfolios by keeping the delinquency levels at the lowest. Huge investments in systems andi n f r a s t r u c t u r e a r e , t h e r e f o r e , a n e c e s s i t y . T h e i n c r e a s e i s b e i n g attributed to new ideas such as round-the-clock functioning of card issuing banks and pulling out all stops even at a loss, to grab a sizeable share of the expanding pie. Not to be left behind in t h i s race, even the big brother, the State Bank of India in association with GE Capital entered the card business. The spurt in the card business has gathered momentum during the p a s t c o u p l e o f y e a r s . F o r instance, the Hong Kong & ShanghaiBanking Corporation (HSBC), was in the credit cards b u s i n e s s s i n c e s e v e n y e a r s , b u t f r o m 5 0 , 0 0 0 c a r d h o l d er s i n 1 9 9 7 , i t h a s about three lakh card holders now. Indias fastest growing credit Card Company - SBI Cards 2.5 lakhc r e d i t c a r d s 2 5 c i t i e s 1 6 m o n t h s . T h e j o i n t v e n t u r e


b e t w e e n Indias largest bank State Bank of India and one of the worlds leading financial services companies GE Capital, SBI Cards & P a y m e n t S e r v i c e s ( S B I C a r d s ) h a s i s s u e d 2 . 5 l a k h credit cards across 2 5 c i t i e s ( t h e l ar g e s t d i s t r i b u t i o n n e t w o r k i n t h e p a y m e n t card industry) within 16 months. He also highlighted Speed, Simplicity and Service as the k e y d r i v e r s of g r o w t h f o r t h e S B I C a r d . S p e e d U n i q u e a n d exclusive 14-day average turnaround time, coupled with availability of the SBI Card in 25 cities in just 16 months. Simplicity Simple application process with minimum documentation. Service 24 hours a d a y / 7 d a y s a w e e k l o c a l c a l l a c c e s s t o t h e S B I C a r d H e l p l i n e across 25 cities. As a result of the focus on the Speed, Simplicity a n d S e r v i c e g r o w t h p l a t f o r m , S B I C a r d s t o d a y o f f e r s t h e l a r g e s t distribution and widest cash advance network for Indias middleclass customers. SBI Cardholders can access cash for emergency purposes from over 158 SBI branches across 68 locations in India.






International and along with VISA are distributed by Financial balance institutions around the world. Cardholders borrow is money against a line of credit and pay it back with interest if the carriedo v e r f r o m m o n t h t o m o n t h . 2 3 , 0 0 0 f i n a n c i a l i n s t i t u t i o n s i n 2 2 0 countries and territories issue its products. In 1998, it had almost 700million cards in circulation, whose users spent $650 billion in more than 16.2 million locations. VISA Card VISA cards are financial institutions around the world distribute a product of VISA USA and along with M a s t e r C a r d . A V I S A c a r d h o l d e r b or r o w s m o n e y a g a i n s t a ccredit line and repays the money with interest if the balance is carried over from month to month in a revolving l i n e o f credit. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards. Affinity Cards A card offered by two organizations, one lending institution, the other a non-financial group. Schools, Non-profit groups, pro wrestlers, popular singers and airlines are among those featured on affinity cards. Usually, use of the c a r d e n t i t l e s h o l d e r s t o s p e c i a l d i s c o u n t s o r d e a l s f r o m t h e n on-financial group.


Standard Card I t i s t h e m o s t b a s i c c a r d ( s a n s a l l f r i l l s ) offered by issuers. Classic Card Brand name for the standard card issued by VISA. Gold Card/Executive Card A c r e d i t c a r d t h a t o f f e r s a higher line of credit than a standard card. Income eligibility is also higher. In addition, issuers provide extra perks or incentives to cardholders. Platinum Card A c r e d i t c a r d w i t h a h i g h e r l i m i t a n d additional perks than a gold card. Titanium Card A c a r d w i t h a n e v e n h i g h er l i m i t t h a n a platinum card. Secured Card A credit card if that the a cardholder secures on witha s a v i n g s d e p o s i t t o e n s u r e p a y m e n t o f t h e o u t s t a n d i n g balance cardholder defaults payments. It is used by p e o p l e n e w t o c r e d i t , o r p e o p l e t r y i n g t o r e b u i l d t h e i r p o or credit ratings.



Smart Card Smart cards, sometimes called chip cards, contain a computer characters, chip smart embedded cards are in now the plastic. Where 16K a typical credit card's magnetic stripe can hold only a few dozen available with of m e m o r y . W h e n r e a d b y a s p e c i a l t e r m i n a l , t h e c a r d s c a n p e r f or m a n u m b e r o f f u n c t i o n s o r a c c e s s d a t a s t o r e d i n t h e chip. These cards can be used as cash cards or as credit cards with a preset credit limit, or used as ID cards with stored-in passwords. Charge Card Fall between a debit and credit card. Works like the latter and you don't have to be an accountholder. Justp a y u p i n f u l l w h e n t h e b i l l a r r i v e s w i t h t h e m a i l . N o outstanding are allowed, in other words, no revolving credit facility either. American Express and Diners are providers.

Rebate Card











accumulate cash, merchandise or services based o n c a r d usage. Cash Card C a s h c a r d s , s i m i l a r t o pr e - p a i d p h o n e c a r d s , contain a set amount of value, which can be read by a special cash card reader. Participating retailers will use the reader to debit the card in increments until the value is gone. The cards a r e l i k e c a s h - - t h e y h a v e n o b u i l t - i n s e c u r i t y , s o i f l o s t o r stolen, they can be used by anyone. Travel Card T h e s e w o r k s m o s t l y a s d e b i t c a r d s f or t h e l i m i t e d purpose t r a v e l . C i t i b a n k D o l l a r C a r d , A m e r i c a n E x pr e s s , B o b c a r d G l o b a l a n d H o n g b a n k T h o m a s C o o k International are among the players in this section. Debit Card It is the accountholder's mobile ATM. Open an account with a bank that offers a debit card, and payments for purchases are deducted from your bank account. The retailer swipes the card over an electronic terminal at his outlet, you enter the personal identification number on a PIN pad and the money is immediately debited at the bank. Citibank and a few domestic banks like Times Bank offer this

of Card





Annual Fee: All credit card issuers charge an annual fee which is payable at the start of the year. The start of the year, of course, is your membership year, and not the calendar year. So, if you got yourself a card in March, you can expect to be billed the annual fee everyM a r c h u n t i l y o u c a n c e l y o u r c a r d . A s a p r i v i l e g e , t h i s f e e i s sometimes waived the first time. When the time comes for renewalo f y o u r c a r d , y o u c a n e v e n u s e t h e r e w a r d p o i n t s y o u h a v e accumulated from using the credit card over the year to settle your annual fee. Forwarding Balance (or Revolving): The most attractive feature of a credit card is that you need not pay off your dues in whole. You can opt to pay 5% of the total amount on or before the due date, every month, the rest is carried forward.B u t t h e r e ' s a p r i c e t o p a y f o r t h i s e x t e n d e d c r e d i t - i n t e r e s t ! Normally, interest varies between 2.5% and 3% per month



APR or Annual percentage Rate: T h e i n t e r e s t r a t e t h a t r ef l e c t s t h e y e a r l y c o s t o f t h e i n t e r e s t t h e outstanding on your card is called the annual percentage rate. This rate is charged to the cardholder on the amounts carried forward beyond the due date for the payment of balances. Most card issuers will tell you their monthly rate of interest. It might sound low at3%, but when you look at the interest rate over the year, it turns out to be as high as 43%. Cash Advance: An important feature - lets you withdraw cash from d e s i g n a t e d A T M s u s i n g y o u r cr e d i t c a r d . U s e d i s c r e t i o n w h e n withdrawing cash on your credit card because the charges for t h i s f a c i l i t y a r e high, around 2.5% to 3% per transaction!

Credit: When you use a Credit card to pay for anything, you g e t a n interest-free period of 45 days. Billing cycles are structured in such a way that you definitely get at least 30 days out of these


asc l e a n c r e d i t t i m e , w h i c h i s e s p e c i a l l y b e n e f i c i a l t o s a l a r i e d people. Better still, you can opt to pay your bill in full when you receive it or you can carry forward your payments by paying as little as 5% of the total amount on or before the due date, every month. You can spend now, pay later.

Convenience: With a credit card on you, you don't need to run the r i s k o f carrying a lot of cash. Cash Advance: Another advantage of a Credit card is that you can use it as an A T M c a r d t o o ! B u t r e m e m b e r , t h er e ' s a f e e t o i t . I t t y p i c a l l y starts with a flat fee going up to a percentage-based fee on the amount of the withdrawal.

DRAWBACKS: Greed! Just because you have credit being extended to you doesn't mean that you should go on a rampage! Use your card with discretion and c a u t i o n . R e m e m b e r , i t i s a n e x t r e m e l y e x p e n s i v e w a y t o b o r r o w money! View it as a convenient and safe way to carry cash, a timely help in an



emergency or taking advantage of an opportunity that you would have otherwise lost out on, like an investment!


Do not leave your Credit Card lying around the house or on your desk at work. If your card is lost or stolen, or you suspect it is being used fraudulently, report it immediately to your bank. Hold on to receipts from your transactions. In fact, keep your receipts filed or in one place - you'll find them easily, should the need arise. And when you want to throw them away, dont just thrash into the bin, shred or tear them before you do. Never give your Credit Card number over the phone, unless youve made the call, and it is to your bank or someone you trust, and you really, really need to!






DECIDING ON THE RIGHT CREDIT CARD How much is the joining fee and the annual fee? 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. OF at least the used to be the case. With cutthroat competition between the card issuing banks, players are ready to waive joining fees and also one-year membership fees for anyone. Grab these offers, or negotiate this for yourself.

.How much is the Add-on card fee?



I f y o u a r e i n t e r e s t e d i n b u y i n g a d d- o n c a r d s f o r y o u r c h i l d r e n , spouse or friend, ask for the add-on card fee. Remember that you will be settling the bills on the add-on card that you so touchingly gift to someone dear to you - the statement will come to you, and t h e r e s p o n s i b i l i t y f o r p a y m e n t i s y o u r s ( a s f a r a s t h e c r e d i t c ar d company is concerned) What is the interest rate? This is actually a question that you should be asking fairly soon in the discussion. Remember, while the upfront one off fees are bread and butter for the credit card Company, this is the jam! If you are the sort who forgets to pay on time, or likes to live it up and live off credit, the interest rate would be of paramount importance. Most credit card c o m p a n i e s c h a r g e a n y w h e r e b e t w e e n 2% t o 3 % p e r month. (Read a whopping 35% to 43% per year). That's where they make their gravy, and that's where you pay! It is always advisable t o p a y of f t h e e n t i r e a m o u n t o n d u e d a t e , or , i f y o u h a v e a l ar g e b a n k b a l a n c e , l o o k f o r c a r d c o m p a n i e s t h a t pr o v i d e t h e t r a n s f e r l a n c e f a c i l i t y . T h e b a l a n c e t r a n s f e r r a t e i s l o w e r f or a c e r t a i n period (say six months) and then the normal rates apply. But again this is a temporary solution to a chronic problem. 4. What is the reach?



Not an important question - most outlets in India accept both the Master card and the Visa card, and most credit card companies provide Visa or Master cards. So its fairly simple, and doesnt need much head scratching - they're all more or less the same. One thing you could do is to check out for the Automated Teller Machines nearest to your house or work place (ATMs - almost all credit card companies now provide you the facility of withdrawing cash fromm a c h i n e s - I g u e s s f o r t h i n g s t h a t c a r d s j u s t c a n t b u y . T h e s e machines are called ATMs, and are helpfully scattered all over the city/country/world). Having more ATM outlets in Thailand wouldnt be of any relevance to a person who rarely travels abroad, though it may certainly be a goal to work towards after buying the card. Please also remember that Amex credit cards are not part of The Visa/ Master chain, and have a separate chain of outlets where its accepted. 5. Is it a Global card? Now this could be useful to you if you are an overseas traveler. A Global card can be used for paying expenses in foreign currency just like you use a credit card to pay in rupees. Nowadays, a Global card is being issued at the same cost as for a similar domestic one. It i s b e t t er t o h a v e a g l o b a l c a r d , e s p e c i a l l y i f t h er e i s n o pr e m i u m attached. 6. How useful are branded or affinity cards?



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 Womens card, Citibank WWF cards. Citibank WWF Visa card donates a percentage of the transaction value made through the card to the WWF fund for its environmental conservation activities Subscription to such cards helps ease the conscience though i t provides no monetary value. A partnership between a bank card issuer and a commercial partner result in a co-branded card. This entitles the cardholder to lots of f r e e b i e s , pr i z e s , d i s c o u n t s o n c o b r a n d e d p r o d u c t s . L o g i c : I f a customer is loyal to one brand, he will want to purchase the other. S o i f y o u w e r e l o y a l t o a p a r t i c u l a r b r a n d , i t w o u l d m a k e s e n s e going for those co-branded cards. E.g. Citibank and IOC, Bank of India and Taj group of hotels etc.

7. Whats the lost card liability? Most Card issuers mention in the brochures that lost card liability is R s 1000. Be careful, that is actually AFTER it is reported to the Bank. The liability is actually unlimited before reporting (in cases like this, you would actually thank the credit limit because though the liability is unlimited, the ceiling should logically be your credit l i m i t , a n d t h e o u t l e t s a c c e p t i n g y o u r s t o l e n c a r d s h o u l d a c t u a l l y check that you (or the person who stole your card) havent exceeded our credit limit).



Avoid banks that make you liable for card misuse for a single minute after reporting it. 8. Are there any freebies? Citibank gives a Ponds gift hamper free on subscription to its Citibank Women card. Personal accident insurance for Air, Road or Otherwise is packaged along with the subscription. Also Baggage cover, Purchase Protection cover and credit shield is bundled free of c o s t along with the card. If you feel one these parameters are important, and then settle for the one that gives a higher cover. 9. Is immediate cash withdrawal possible? Check out if the Bank has any ATMs near your house or workplace. This surely helps in times of emergency. The cost component for a cash withdrawal could be classified as follows: Service fee(transaction fee) each time you pull out money, and Interest rate for t h e p e r i o d f or w h i c h y o u h a v e u s e d t h e m o n e y - u n t i l s e t t l e m e n t date. If you are going to withdraw cash frequently, better watch out for this cost. 10. How long is the free credit period? The days of credit one gets depends on the statement date and the date of transaction. On an average, you could assume you'd get around 20 days of free credit. However, if you buy just


after the statement date, you could end up getting unto 50 d a y s o f c r e d i t . Look for cards that give you the highest free credit period! 11. Is a Helpline available? A 24hour Helpline service from the Card Company helps t h e c a r d h o l d e r s d u r i n g t h e n o n b a n k i n g h o u r s . R e p o r t i n g o f t h ef t , checking of available credit limit and other enquiries can be made by the cardholder round-the-clock. In the end, like everything else in life, the card you want is really up to you - what matters the most to you - credit, reach, combination of parameters. Use our card category on the left bar to simply list out the names of the cards, or choose by bank name and s e e t h e c a r d s t h e y o f f e r . O r l o o k f o r c a r d s o f f e r i n g t h e l o w e s t interest rate. Of the lowest charges on cash withdrawal (believe me, it gets to be a serious consideration as one goes along). Go to our shortlist card section, and search for cards based on any criteria that you want. Happy hunting and stay careful - you may like to use our section on how to use the card carefully to minimize the chance of its misuse by someone else. t h e f r e e b e e s , i n t er n a t i o n a l r e a c h o r a







Card issuers Citibank NA Citibank NA Citibank NA Icici Bank Icici Bank SBI bank Standard chartered

Brand Gold/Preferred Gold/Preferred Indian Oil Soild/Gold Starling Classic Gold

Card Type Master Visa Master Visa Visa Visa Visa


International International Domestic International Domestic International International

With the credit card truly becoming an international citizen, issuers h a v e b e g u n h i g h l i g h t i n g t h e v a l u e - a d d e d f e a t ur e s of f e r e d



a l o n g with the basic product. While some of them are offering attractive interest rates, others are luring customers by their reward schemes. With a plethora of choices on offer it is not easy to c o m e t o a decision on any particular card.


FEE-HEAVY FOREIGN TRANSACTIONS Many major credit card issuers charge a fee for card transactions in foreign countries. The cost of cash advances is particularly onerous. When traveling abroad, carry a mix of plastic, cash, debit cards and travelers checks. WANT A BETTER RATE? Just ask for acquiring new credit card customers is expensive and timeconsuming, so issuers don't want to lose creditworthy i n d i v i d u a l s . I f y o u ' v e h a d a y e a r o f o n - t i m e p a y m e n t s , c a l l y o ur credit card issuer and ask for a cut on your interest rate. CUT CREDIT CARD COSTS



Make payments on time, avoid cash advances and don't exceed your c r e d i t l i m i t . C a s h a d v a n c e s a r e m o r e c o s t l y a s t h e r e ' s n o g r a c e period, so you pay interest from the day you take the money.

IDENTITY THEFT The No. 1 identity theft is credit card fraud. New card accounts are o p e n e d or existing accounts are taken over. The Federal Trade Commission offers a hotline and Web site for advice and tips. SAVE STRESS WITH LESS DEBT The stress of credit card debt has been directly linked to physical problems like heart attacks, insomnia, explosive emotions, smoking, overeating and lack of concentration.

SHOP ONLINE WITHOUT THE WORRY Credit card companies are switching to zero liability. If your credit c a r d i s misused on the Internet, you won't be liable for online transactions charged by an unauthorized user. But zero liability doesnt mean zero responsibility you'll have to meet cert a i n requirements. FRAUD ALERT Placing a fraud alert on your credit files prevents an im p o s t e r opening credit in your name. The downside is that you give up the convenience of "instant credit." You can't sign up for a new credit card and go shopping with it three minutes later.



TEEN CONSUMERS Credit card companies are targeting the increasingly powerful teenc o n s u m e r . T e e n s g e t t h e c r e d i t c a r d a n d t h e b i l l , b u t p a r e n t s ar e legally responsible. Nonprofit organizations caution that teens lack personal finance teaching, and aren't ready for plastic. BE CAREFUL WHEN YOU DO THE CARD HOP Changing credit cards for a better deal may net attractive t e a s e r rates, but many cards now deter balance transfers with tough terms and high costs. Read the fine print carefully. SILENCING PHONE SOLICITORS: Y o u c a n p u l l t h e p l u g o n t e l e m ar k e t e r s c a l l i n g y o ur h o m e . T h e Telephone Consumer Protection Act requires telemarketers to record your 'donot-call' request and refrain from dialing you for 10years.

CREDIT SCORE During and after a divorce, you need to make a clean financial break to keep your credit report accurate. A first step is to cancel credit card accounts, even if you were only an authorized user, and reapply for new accounts. DIGITAL WALLETS Digital wallets, or e-wallets, are extensions of a consumer's credit cards. Basic e-wallets store cardholder information, filling in account and personal information at cyber stores. They are convenient, secure solution to shopping online. DON'T FILL UP ON GASOLINE CREDIT CARDS


Gas company cards offering rebates on purchases can be worthwhile when gas prices are high. But the annual percentage rate a n d t h e a n n u a l f e e charged are higher than normal cards. People w h o c a r r y a revolving balance will find these cards much less rewarding. CREDIT UNION CARDS Credit unions usually have lower interest rates and fees than banks, though they tend to have fewer choices than bankcards. STUDENT CREDIT CARD CHOICES Students and their families looking for the best student credit card need to focus primarily on annual fees and interest rates. Generally, s t u d e n t s w i t h a w o r k a n d c r e d i t h i s t o r y w i l l f i n d a r e g u l a r c r e d i t card is the best deal. VARIABLE-RATE CARDS The cost of using credit cards has increased. Variable-rate cards, themost common type in the nation, tend to rise in step with the primate. The prime rate has gone in the Fed's efforts to cool the red-hot economy, but spending hasn't been significantly reduced. FINANCING VACATIONS Most people finance vacations with their credit cards. Even thea v e r a g e c r e d i t c a r d i n t e r e s t r a t e c a n t u r n y o u r v a c a t i o n i n t o a financial strain if you spend above your means and take up to a year to pay it off. EMERGING CREDIT



Tweeters people with emerging credit or recovering credit -- can f i n d g o o d c r e d i t c a r d d e a l s . T o g e t t h e b e s t d e a l t h e y need to compare annual percentage rates, grace periods, credit limits, and fees, and avoid credit cards with hefty application and processing fees.

AFFINITY CREDIT CARDS Affinity credit cards (aka "charity" cards) may give you a sense of purpose to your spending, but can cost more than your actual donation. Affinity cards carry high interest rates and annual fees. They have more value if you don't carry card balance. PAYING FOR VACATIONS You can enjoy that vacation even after it's over by limiting your credit card use. Consider planning ahead, setting budget and saving for your vacation. If you're still short-funded, a home-equity loan offers a better interest rate than a credit card. STUDENT LOAN DEBT Graduating college students face an average loan debt of more than$35,000, and it needs to be attacked aggressively. First, concentrate on paying down credit card debt, and then tackle your student loa

CITIBANKS CREDIT CARDS DEBT ELIMINATION STRATEGIES In addition to encouraging credit card competition through promoting the most attractive cards in the country, Citibank help c o n s u m e r s c o p e with credit card debt by teaching various debtr e d u c t i o n s t r a t e g i e s . W e h o p e t h a t y o u f i n d t h e f o l l o w i n g t i p s beneficial.



INTEREST RATE AWARENESS: We cannot stress enough the importance of being aware of interstates when using your card(s). Please utilize the lists above!!! High rate cards can be put a BIG dent in your pocketbook. To illustrate our point again, a cardholder with an average balance of $2,500 and 19.99% purchase rate will pay $1000.00 in interest alone in just two years! The same cardholder would pay only $400.00 in interest if the rate were lowered to 8.00%, a difference of $600.00! Also, beware of cash advance rates. Cash advance rates are typically much higher than purchase rates and usually there is no grace period for cash advances (not to mention cash advance fees). Therefore, avoid cash advances if at all possible. TAKING ADVANTAGE OF PROMO RATES While introductory or "teaser rates" are generally short lived and are intended strictly to entice consumers, savvy consumers can benefit a great deal from promotional rates. Look for cards that offer longer term introductory rates and longer term promotional rates on balance transfers (6-12 months). Some cards even offer very attractive long-term promotional rates on balance transfers...rates that are good until the dollar amount transferred is entirely paid off! Consumers that have more than one card with available credit can transfer balances between cards in order to take advantage of promo. Transfer rates (ap l o y k n o w n a s " c a r d d u m p i n g ") . F i n a l l y , w h e n t h e pr o m o . R a t e period ends (for transfers), it is a good idea to call the card company and request an extension of the rate. Consumers wit h a g o o d payment history often get extensions. You must be aggressive when dealing with credit card companies! You can also negotiate to have your regular interest rate lowered. Threatening to pay off a given c a r d often puts consumers in a bargaining position when dealing with credit card cos



AVOIDING THE MINIMUM PAYMENT PITFALL: One of the greatest card pitfalls is making only the mini m u m payment each month. Make every effort to pay over the minimum e a c h m o n t h , e v e n i f i t i s o n l y a f e w d o l l a r s o v e r . T h e long-termimpact of making "just the minimum payment" is d e v a s t a t i n g . According to Consumer Credit Counseling Services, paying the $60 minimum payment on a $3,000 credit card balance would take eight years to pay off and would translate into $2,780 in interest! B y paying only $50 more a month, however, the debt would be paid off in three years and result in a savings of $1,800 in interest charges! GRACELESS GRACE PERIOD: Avoid cards that begin computing their grace period at the time of purchases, rather than billing. Only a few cards still use this method of interest computing, but there are still some out there. Keep your eyes peeled







T h e b a n k s b a t t l e t o d a y i s m or e w i t h c a s h t h a n w i t h o t h er banks. Considering the huge potential of the Indian market, it i s i n t h e interest of the issuers to educate the consumers about the benefits of holding credit card. The campaigns must also be convincing enough to clear the myth that credit cards increase spending. Focus should be on changing non-card related spending to card related spending. The issuers must focus on service and pricing and must recognize the importance of the billing and payment process to retain credit card holders. The credit cards schemes would be successful only if they meet the customers requirement of wider acceptability rather than fringeb e n e f i t s l i k e n o n - c r i s i s c r e d i t o r pr e s t i g e p r o p o s i t i o n . Emphasisshould be on offering a wider basket of services t h r o u g h c r e d i t cards enabling purchases for a wide variety of products along with ATM usage, backed by much more comprehensive merchant establishment network. The banks must also increase the number of cardholders by reducing the initial-one time subscription fee. The banks should step up advertising that will help to build a brand image and create a higher brand recall like that of Citibank. With more and more people willing to adapt to credit cards, banks should undertake innovative strategies to increase card spends. Simultaneously, to cater to high net worth customers and those with n i c h e n e e d s , b a n k s s h o u l d p r o v i d e m o r e o f p r e m i u m p l a s t i c a n d CO-cards that piggyback on the


existing infrastructure, but provide holders with exclusive add-ons. Future promotions could include: Telemarketing, direct sales, direct mail, promotional advertising through media, common ATM services between banks (to reduce cost of operations), schemes likec a r d c a r n i v a l a n d s a l e s e x e c u t i v e s c o n t e s t s a n d a p l e t h o r a o f augmented services should be introduced to induce greater number of people to adopt to plastic money.


The study is confined to NCR only.

Most o f t h e i n f o r m a t i o n i s s u b j e c t i v e d a t a c o l l e c t e d t h r o u g h personal interaction with people transacting in the plastic money market. As a result the personal biases of individuals could affect the study. However, to counter this data has been verified f r o m a n u m b e r o f d i f f e r e n t s o u r c e s t o g i v e i t a m e a s u r e o f authenticity. Study was constrained by limited availability of data. Not all banks could reveal their confidential marketing strategies and statistical information.






Whenever Internet transactions are discussed, immediatel y t h e thought of credit card comes to everybodys mind. This is because in US the payments by credit a card is quite common. Evenbeforeo n l i n e p u r c h a s e s h a v e b e c o m e p o p u l a r ; n or m a l l y p u r c hases are m a d e t h r o u g h c r e d i t c a r d s o n l y . T h e r e f o r e i n U S t h e r e w a s n o problem in making people to switch over to online purchases as this mode of payment is already in vogue. Even in US, much discussions going on as to how to avoid frauds, m i s a p p r o p r i a t i o n , e t c o f c r e d i t c ar d s o n c e t h e c a r d n u m b e r i s g i v e n o n l i n e t o m e r c h a n t . E n cr y p t i o n t e c h n o l o g i e s . Secure socket layers, etc are being introduced to avoid such things In spite of all these measures, still reports keep coming regarding credit card frauds here and there. Ino t h e r w o r d s , t h e r e i s n o 1 0 0 % f o o l p r o o f t o m a k e c r e d i t c a r d payment a safe mode of payment. I n o t h e r c o u n t r i e s , w h e r e c r e d i t c a r d s p a y m e n t s y s t e m i s n o t a s p o p u l ar a s U S , o n l i n e s h o p p i n g t h r o u g h c r e d i t c a r d s r e s u l t e d i n great failures. At least in Singapore, a mega shop had experienced a fraud of huge magnitude and decided to suspend immediately their online business. Similar stories are not uncommon in other countries Scenario in India. In India the situation is far from satisfactory to use the credit cards as a means of making payments for online purchases f o r t h e following reasons; 1.Use of credit cards is popular to only a few thous a n d s o f executives, businessmen, etc from big cities. 2. That any person using credit card is liable to declare IT m a d e many people surrendering their cards. In other words if credit card is


made the payment mechanism, only IT payers will be eligible to buy goods online. 3. Still many leading credit card companies are yet to install their infrastructure to process the online payments. 4. Then there is the question of sales tax laws Each State has its own rate of tax structure for each and every commodity. How to charge tax when a transaction takes place online and at what rate will pose problems of billing. 5.Many establishments do not like to offer credit card fa c i l i t y due to the service charges to be paid to cr card companies. They gather payment only after a certain period of time once the goods are sold. Both of them make the profit margin less. As mentioned earlier, the fraud element is applicable to India also. In view of all these factors, in India; Use of credit cards cannot be expected to boost the sales of online sales, particularly business to customer. Then what is the way out? There are other methods of payments for Indian online business, which are given below: Payments by electronic cash/ cheque may be made legally valid including electronic signature .I believe once the cyber laws are passed by GOI, this is possible. Each merchant/shopper can allot a secret code number to the existing clients (customers). On receipt of this code number, the goods can be dispatched by VPP and other modes of dispatch, which will ensure collection of payment against delivery. However, this facility can be extended only to existing customers.



Banks should be asked to immediately create necessary facilities for any of the a/c holders to operate the a/c through online. Once p u r c h a s e i s m a d e , t h e a / c h o l d e r c a n t r a n s f e r t h e r e q u i r e d amount to the merchant A/C online. The MERCHANT BANK CAN INTIMATE the shopper about the transaction. All these activities can be carried out instantly though proper programming. Activity can be made part of the ordering activity. Large organizations can issue authorization letters to each o f their employee who wants to avail the online purchasing facility and device a mechanism through which the company itself pays the merchant his dues. This would require installation of transaction servers in the companies or can be integrated with their online business activity. Similarly all government establishments can device a mechanism to enable their employees make online purchases. These are all some of t h e i d e a s t o m a k i n g t h e o n l i n e p u r c h a s e s e a s i e r a n d s m o o t h e r without affecting the payment due to the shoppers. I n c o n c l u s i o n , p a y m e n t t h r o u g h c r e d i t c a r d s w i l l s n o t result in increasing the online shopping as generally believed. We need to device different mechanisms taking into account I n d i a n laws, shoppers requirements, banking practices prevalent in our country.






HOW TO PROTECT The following are my recommendations. There may be ot h e r options available as well. 1. Never give your credit card to the company. Make payment bycheque instead. 2. Monitor your credit card statements. 3. If there is an unauthorized charge, report it to Micro Forecasts immediately and demand a charge reversal. Wait several days and then check with your credit card company to see if you received the c r e d i t . Do not wait for your next statement to see if the credit appears. 4. If the refund is not there, call Micro Forecasts again. M o s t i m p o r t a n t l y , d e n y t h e c h a r g e i m m e d i a t e l y w i t h y o ur c r e d i t c a r d company. F o r t h i s t o b e e f f e c t i v e , i t m u s t b e d o n e i n w r i t i n g , a n d m u s t b e done within 60 days from the date you received the statement on w h i c h t h e d i s p u t e d c h a r g e a p p e a r e d . T h i s t i m e f r a m e i s a s p e r federal law. I believe you


are much more likely to get your money back if the credit card company is involved. 5. Report your credit card as lost/stolen so that no further charges can occur. You will get a new card within a couple of week. Many people have done this, including myself. 6. Report the problem to authorities as per the next section is?

Very likely

somewhat likely

Not sure

Somewhat unlikely

what extent does credit card service exceed your expectations?



Very great extent

Some extent

Little extent

Very little extent

Which of the following statements, according to you most representative of your credit card service provider?

They are Helpful and Friendly

They are polite, cheerful and are knowledgeable operators In tune with the needs of its clients

Prompt in dealing with customer complaints

Unwilling to go the extra mile for its customers



Poor customer phone support

You are often put on hold for a long time

H o w s a t i s f i e d a r e y o u w i t h t h e e f f i c i e n c y of c a l l h a n d l i n g w h e n placing calls to credit card service provider?

Very satisfied

Somewhat satisfied


Somewhat dissatisfied

Very dissatisfied

Credit card service provider understands my service needs.



Strongly agree


Neutral/Not sure


Strongly disagree

. What are the added benefits you wish to acquire from the card? Acceptability

Longer credit period

Higher credit limit

Lesser charges



Better offers

Please rank the services of the following card issuers in order of your preference. Citibank


Bank of Baroda

Bank of India

Standard Chartered

Times Card





Personal Details : Age :

Profession : Income : 15000-25000 40000-60000 25000-40000 Above 60000

Thank you for taking the time to complete this survey






It was found that for the frequent travelers acceptability was t h e most important criteria and was given the highest weight age Following attributes have been analyzed as per the consumer survey conducted.




The changing trends in the payment systems are global and even in India revolve around the change in customer needs and the evolution of financial markets. Traditionally Indians like to pay in cash or at the most avail the services of a bank. As a result credit card companies had to educate the consumers and spread awareness of the uses of its products. The companies have tried to address this issue through promotional campaigns:

Placing of take away firms of credit card at more t h a n a thousand merchant establishments.

Appointing of DSAs Using business magazines and newspapers for advertisement.

Mailing of forms along with contests to professionals and middle management executives etc.

Tapping the get member route



Reducing their minimum eligibility criteria and changing income documentation structure.

Introduction of photo cards.







manufacturer (e.g.Onida, 0Philips) to sell their products. Providing ATM facility to their card holders Travel assistance via tele-banking.







Annual report SBI Annual report ICICI Annual report Citibank


Google search Yahoo search AltaVista search MSN search India infoline.com MAMA search Citibank.com Sbi.com Icici.com Times of India Business world Business India Outlook India today

A& m magazine

Strategic marketing magazine Economic times Financial times



Times of India Hindustan times Indian express The Hindu

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