|Credit card usage has touched an all time high for the first quarter of the current fiscal. Consumers all over the country spent Rs. 28,465 crore through credit card. This was a growth of 9.9% from the previous quarter.
The transaction value for the April- June quarter was more than the annual value for FY'04 and FY'05. This increase in spends is attributed to innovative rewards/loyalty bonuses offered by cards companies to customers.
There have been reduction in defaults due to banks access to credit bureau data, clubbed with better interaction between payment companies and merchants to provide offers have contributed to higher credit card usage.
More and more customers are making switch from debit cards to credit cards to make use of the interest-free credit period. While SBICards CEO, Mr. Kadambi Narahari states, "Indian consumers are becoming savvy and prefer to use credit cards to avail the interest-free credit period and the discount offers by large retailers in the country. They still prefer to pay the entire amount before the due date. As the market matures, we expect more and more customers will start using the EMI (equated monthly instalment) option."
Variety of offers from credit card companies have ensured increased usage, and unlike before when customers just spent on travel and retail purchases at poit of sales (PoS), customers are paying mobile phone bills and insurance premium through cards.