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Submitted in partial fulfillment of the requirement of
Bachelor Of International Business !inance"
Jamia #illia Islamia" $ni%ersit&"
Ne' (elhi)**++,-

Submitted b&. /O!AI0 1ASSAN
SESSION .) ,++2),+**

Submitted to:
NE" DELHI#$$%%&'
A project gains a lot of relevance as it on time activity
serving a definite object. Practical experience in undertaking a
project teaches many things which would otherwise elude
I am very indebted and obliged to have Ms. VA!"A
#A$"I %lecturer& project guide and whose scholarly guidance
and sustained interest in the progress of my project have been
the major contributing factor in preparation of this project
I am also placed my sincere thanks to all respondents and
concerned people to this project.
'he credit card had its beginning in an embarrassing incident that
took place in the early ()*+,s in America. 'he story goes that Mr.
Mc-amara. a -ew /ork businessman took his friends out to dinner.
At the end of meal he discovered that he had forgotten his wallet at
home0 the proprietor was kind enough to allow him a later
settlement of bill. As Mc-amara stepped out of the restaurant he
had the brainwave for the introduction of credit cards 1 system of
availing instant credit upon confirming the identity of cardholder.
'hus was born the !iners 2lub 2ards0 the pioneer of today,s
multibillion1dollar plastic money business.
!iners 2lub adopted a promising approach by recruiting various
hotels and restaurants to act as member establishments for accepting
the cards. -ot only did these establishments pay a commission on
member,s purchases but the members also paid an annual
subscription fee. !iners 2lub vetted its members for credit
worthiness and guaranteed payment to participating establishment.
'hus was born the first 3'ravel and 4ntertainment 2ard,. It was
followed by American 4xpress0 which is now a dominant force in
the 'ravel and 4ntertainment cards industry0 and by ()*) by 2arte
5lanche0 after many vicissitudes is now a part of 2iti 5ank 4mpire
'ogether 6ith !iners 2lub. In the present time American 4xpress
leads the travel and entertainment %'74& card industry.
'he next great leap1forward came from 5ank of America0 which in
other banks. #uch cardholders could use their card ()88 offered to
license its successful blue0 white and gold 5ank America card to at
any accepting merchant establishments around the globe. 9ater in
():: all the national and international 5ank America licenses were
pulled together under the single name of Visa.
-ot to be outdone0 a rival group of American 5anks came together
in ()88 under the name of Interbank0 later renamed Master 2harge
and later still Master 2ard. 4ver since Master 2ard and Visa and
their affiliates have carved the world credit card market.
In the ();+s credit card concept was launched in India through the
!iners 2lub card0 and soon0 within a couple of months both Visa
and Master card entered into the Indian market.
What i a C!"#it Ca!#$
Credit Cards - It's credit to you!
A 2redit 2ard is referred to as <plastic money<. 2arrying a lot of
cash on you can be cumbersome0 risky and sometimes0 you run
short of it0 just when you most need it. %emember the #A94 at
your favorite ready1mades store=&. A 2redit card is the smart
solution to these problems. It is a convenient and safe alternative for
5esides0 it says things about you. Most people associate a credit
card with a prestige0 which it most certainly bestows on you0 but
more importantly0 it says that you have taken the onus of being
responsible 1 to be extended credit> #o0 when you get yourself a
card0 remember that0 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
C!"#it Ca!# ? A credit card is a financial instrument0 which can be
used more than once to borrow money or buy products and services
on credit. 5anks0 retail stores and other businesses generally issue
C!"#it %i&it ? 'he maximum amount of charges a cardholder may
apply to the account.
A''(a% )"" ? A bank charge for use of a credit card levied each
year0 which ranges depending upon the type of card one possesses.
5anks usually take an initial fixed amount in the first year and then
a lower amount as yearly renewal fees.
R"*+%*i', Li'" O) C!"#it 1 An agreement to lend a specific
amount to a borrower and to allow that amount to be borrowed
again once it has been repaid. Most credit cards offer revolving
P"!+'a% I#"'ti)i-ati+' N(&."! /PIN0 1 As a security measure0
some cards re@uire a number to be punched into a keypad before a
transaction can be completed. 'he cardholder can usually change
the number.
T"a"! Rat" 1 Aften called the introductory rate0 it is the below1
market interest rate offered to entice customers to switch credit
J+i't C!"#it 1 Issued to a couple based on both of their assets0
incomes and credit reports. It generally results in a higher credit
limit0 but makes both parties responsible for repaying the debt.
Mat"!Ca!# ? Master2ard is a product of Master2ard
International and along with VI#A are distributed by financial
institutions around the world. 2ardholders borrow money
against a line of credit and pay it back with interest if the
balance is carried over from month to month. BC0+++ financial
institutions in BB+ countries and territories issue its products.
In ());0 it had almost :++ million cards in circulation0 whose
users spent D8*+ billion in more than (8.B million locations.
VISA Ca!# ? VI#A cards are financial institutions around the
world distribute a product of VI#A E#A and along with
Master2ard. A VI#A cardholder borrows money against a
credit line and repays the money with interest if the balance is
carried over from month to month in a revolving line of
credit. -early 8++ million cards carry one of the VI#A brands
and more than (F million locations accept VI#A cards.
A))i'it1 Ca!# 1 A card offered by two organiGations0 one a
lending institution0 the other a non1financial group. #chools0
non1profit groups0 pro wrestlers0 popular singers and airlines
are among those featured on affinity cards. Esually0 use of the
card entitles holders to special discounts or deals from the
non1financial group.
Sta'#a!# Ca!# ? It is the most basic card %sans all frills&
offered by issuers.
C%ai- Ca!# ? 5rand name for the standard card issued by
G+%# Ca!#2E3"-(ti*" Ca!# ? A credit card that offers a
higher line of credit than a standard card. Income eligibility is
also higher. In addition0 issuers provide extra perks or
incentives to cardholders.
P%ati'(& Ca!# ? A credit card with a higher limit and
additional perks than a gold card.
Tita'i(& Ca!# ? A card with an even higher limit than a
platinum card.
S"-(!"# Ca!# ? A credit card that a cardholder secures with a
savings deposit to ensure payment of the outstanding balance
if the cardholder defaults on payments. It is used by people
new to credit0 or people trying to rebuild their poor credit
S&a!t Ca!# ? #mart cards0 sometimes called chip cards0
contain a computer chip embedded in the plastic. 6here a
typical credit card<s magnetic stripe can hold only a few doGen
characters0 smart cards are now available with (8H of
memory. 6hen read by a special terminal0 the cards can
perform a number of functions or access data stored in the
chip. 'hese cards can be used as cash cards or as credit cards
with a preset credit limit0 or used as I! cards with stored1in
Cha!," Ca!# ? fall between a debit and credit card. 6orks
like the latter and you don<t have to be an accountholder. Iust
pay up in full when the bill arrives with the mail. -o
outstanding are allowed0 in other words0 no revolving credit
facility either. American 4xpress and !iners are providers.
R".at" Ca!# ? 'his is a card that allows the customer to
accumulate cash0 merchandise or services based on card
C+4B!a'#"# Ca!# ? 'his is a marriage of convenience
between two service providers who want a trade1off with the
other<s strengths. #pecific facilities are made to members
through these tie1ups. #o0 'imes 5ank and 2itibank have a
co1branded card that allows concessional rates for add1on
cards or telephone banking. #tan chart and "industan 9ever
9imited have a co1branded card to sell Aviance beauty
products. #5I1$4 2apital has a co1branded card for retail
Cah Ca!# ? 2ash cards0 similar to pre1paid phone cards0
contain a set amount of value0 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. 'he cards
are like cash 11 they have no built1in security0 so if lost or
stolen0 they can be used by anyone.
T!a*"% Ca!# 5 these works mostly as debit cards for the
limited purpose of travel. 2itibank !ollar 2ard0 American
4xpress0 5ob card $lobal and "ong bank 'homas 2ook
International 2ard are among the players in this section.
D".it Ca!# ? It is the accountholder<s mobile A'M. Apen an
account with a bank that offers a debit card0 and payments for
purchases are deducted from your bank account. 'he retailer
swipes the card over an electronic terminal at his outlet0 you
enter the personal identification number on a PI- pad and the
money is immediately debited at the bank. 2itibank and a few
domestic banks like 'imes 5ank offer this.
A''(a% F""6
All credit card issuers charge an annual fee which is payable at the
start of the year. 'he start of the year0 of course0 is your membership
year0 and not the calendar year. #o0 if you got yourself a card in
March0 you can expect to be billed the annual fee every March until
you cancel your card. As a privilege0 this fee is sometimes waived
the first time. 6hen the time comes for renewal of your card0 you
can even use the reward points you have accumulated from using
the credit card over the year to settle your annual fee.
F+!7a!#i', Ba%a'-" /+! R"*+%*i',06
'he most attractive feature of a credit card is that you need not pay
off your dues in whole. /ou can opt to pay *J of the total amount
on or before the due date0 every month0 the rest is carried forward.
5ut there<s a price to pay for this extended credit 1 interest>
-ormally0 interest varies between B.*J and CJ per month.
APR +! A''(a% 8"!-"'ta," Rat"6
'he interest rate that reflects the yearly cost of the interest the
outstanding on your card is called the annual percentage rate. 'his
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 at
CJ0 but when you look at the interest rate over the year0 it turns out
to be as high as FCJ.
Cah A#*a'-"6
An important feature 1 lets you withdraw cash from designated
A'Ms using your credit card. Ese discretion when withdrawing
cash on your credit card because the charges for this facility are
high0 around B.*J to CJ per transaction>
6hen you use a 2redit card to pay for anything0 you get an
interest1free period of F* days. 5illing cycles are structured in
such a way that you definitely get at least C+ days out of these as
clean credit time0 which is especially beneficial to salaried
people. 5etter still0 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 *J of the total amount on or before the due date0 every
month. /ou can spend now 0 pay later.
6ith a credit card on you0 you don<t need to run the risk of
carrying a lot of cash.
Cah A#*a'-"6
Another advantage of a 2redit card is that you can use it as an
A'M card too> 5ut remember0 there<s a fee to it. It typically
starts with a flat fee going up to a percentage1based fee on the
amount of the withdrawal.
Iust because you have credit being extended to you doesn<t mean
that you should go on a rampage> Ese your card with discretion and
caution. emember0 it is an extremely expensive way to borrow
money> View it as a convenient and safe way to carry cash0 a timely
help in an emergency or taking advantage of an opportunity that
you would have otherwise lost out on0 like an investment>
D+: & D+'t:
!o not leave your 2redit 2ard lying around the house or on
your desk at work.
If your card is lost or stolen0 or you suspect it is being used
fraudulently0 report it immediately to your bank.
"old on to receipts from your transactions. In fact0 keep your
receipts filed or in one place 1 you<ll find them easily0 should
the need arise. And when you want to throw them away0 don<t
just thrash into the bin0 shred or tear them before you do.
-ever give your 2redit 2ard number over the phone0 unless
you<ve made the call0 and it is to your bank or someone you
trust0 and you really0 really need to>
'he credit card industry in India has registered an encouraging
growth in recent times0 but the usage pattern of credit cards remains
a point of conc+ern0 those in the industry say. 'here has been a
seven1fold increase0 with the number of cardholders touching over
C; lakh. 'hese figures point towards the fact that the credit card
industry in India is growing at a brisk annual rate of C+ per cent and
is expected to grow at a similar rate in the coming years.
6hile issuing the cards may seem to be easy0 the challenge for the
banks lies in being able to manage their portfolios by keeping the
delin@uency levels at the lowest and customer satisfaction levels at
the highest. 2ustomer satisfaction is the key to success. /ou want
customers to be happy with the products and services you provide.
If they feel they have received good value for their money0 your
business will prosper. $etting your customers to tell you what,s
good about your business0 and where you need improvement0 helps
you to be sure that your business measures up to their expectations.
Apart from attracting potential card users0 customer retention is also
one of the most important factors influencing a card issuer,s
success. 1111. 6ith the influx of new financial institutions in the
card market0 people have started using cards on a more regular
basis. 'he level of services provided by these organiGations is
increasing day by day. In order to ensure that the existing customers
stay loyal0 ArganiGation has to ascertain whether its existing
customers are satisfied with its current service offerings.
'his research has tried to study the satisfaction levels of a sample of
(++ credit card holders. 'hese respondents each hold credit cards0
which may be of different kinds.
'he credit card industry in India has registered an encouraging
growth in recent times0 but the usage pattern of credit cards remains
a point of concern0 those in the industry say. #even years back0
India had a base of around five lakh credit cards. 'here has been a
seven1fold increase0 with the number of cardholders touching over
C; lakh. 'hese figures point towards the fact that the credit card
industry in India is growing at a brisk annual rate of C+ per cent and
is expected to grow at a similar rate in the coming years. 'his
fortifies the view that conservative purchasing ideas are giving way
to the big in1thing. 5ut it is the usability that raises doubts.
According to a survey by the 2redit 2ard 7 Management
2onsultancy %22M2&0 :( per cent of first time credit card
applicants in the country have expressed the need for advice on
appropriate card selection despite the plethora of cards available in
the market. 'hrough this survey it has come to realiGe a long felt
need of potential and existing cardholders for advice on suitable
selection of a credit cards. 'he whole idea behind the introduction
of the credit cards was to increase the purchasing capacity of the
cardholder. 6ith this in mind0 the foreign banks launched a credit
card blitGkrieg on the Indian customer.
'he innovations have already begun to show their effect. 'he
#tandard 2hartered 5ank has seen its credit card base shoot up after
the launch of its $lobal upee 2ard in March last year.
It has seen the fresh issuance of global card increase by more than
one lakh0 and the bank now has a base of more than half a billion.
5ut the real challenge for the banks is to make the holder spend
more on the card. $oing by estimates0 India has a long way to be
anywhere near the matured markets. 'he markets like the Enited
#tates and 4ngland have an average annual card spend of (0C++ and
C08++ dollars respectively.
'he credit card players will have to think about simplifying the
foreign exchange transactions. 6hen one uses the card0 it is entirely
his responsibility to make sure that exchange controls have been
complied with. 'he 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. 'he real point of worry is the
spending on the credit cards. According to estimates0 the average
card spending in India is even less than that in Indonesia. 'hose in
the credit card business say that per capita credit card spending in
India is about five hundred dollars %s B(0*++&0 whereas in
Indonesia0 it is about 8:; dollars %s B)0(*F&. At present there are
over a doGen players in the credit card market in India0 and the fact
is the foreign banks are clearly the leaders. 'he leaders will surely
be identified by the innovations for the card users.
5ut the alarm has been raised for the banks by the figures that show
that while the average usage in Malaysia is B: times annually0 in
India it is only (( times. #ome of the key factors impacting the
cards business in India are limited credit0 wide geographical spread0
limited telecommunication infrastructure and emerging regulatory
controls. 'he other players feel that the card acceptance base in
India has to be widened. #uggestions include credit card usage at
petrol pumps and railway bookings.
'hey also point out that though the cards business has been in the
country for long0 but even today the insurance premium cannot be
paid by card. 'hough 9I2 is talking about the introduction of this
facility to customers0 but its turning into reality may take time.
'here is talk of widening the card business with new features0 but
the present scenario does not paint a positive picture0 with many
loopholes remaining to be plugged.
Af the twenty million taxpayers in India0 more than ten per cent of
them are cardholders. 'hose in the industry point out that this figure
is not bad0 considering the fact that. the cards business is still in its
initial stages. "owever0 the players feel that the business has not
reached an optimum level to say that they are making money. 4ven
the largest player in the Indian market does not still have the
economies to make the card business really profitable in India0
despite the fact that it has more than one million credit card holders.
9ess than two per cent of private consumption spending in India is
done on cards.
6hile issuing the cards may seem to be easy0 the challenge for the
banks lies in being able to manage their portfolios by keeping the
delin@uency levels at the lowest. "uge investments in systems and
infrastructure are0 therefore0 a necessity. 'he increase is being
attributed to new ideas such as round1the1clock functioning of card
issuing banks and pulling out all stops even at a loss0 to grab a
siGeable share of the expanding pie. -ot to be left behind in this
race0 even the big brother0 the #tate 5ank of India in association
with $4 2apital entered the card business.
'he spurt in the card business has gathered momentum during the
past couple of years. Kor instance0 the "ong Hong 7 #hanghai
5anking 2orporation %"#52&0 was in the credit cards business
since seven years0 but from *+0+++ card holders in ()):0 it has
about three lakh card holders now.
India,s fastest growing credit card company 1 #5I 2ards B.* lakh
credit cardsLB* citiesL(8 months. 'he joint venture between
India,s largest bank ? #tate 5ank of India and one of the world,s
leading financial services companies ? $4 2apital0 #5I 2ards 7
Payment #ervices %#5I 2ards& has issued B.* lakh credit cards
across B* cities %the largest distribution network in the payment card
industry& within (8 months. 'hereby achieving the target in the
fastest period seen in India,s payment card industry.
#5I 2ards 7 Payments #ervices attributed this success to #5I,s
enormous brand e@uity0 and unparalleled retail branch network
coupled with $4 2apital,s payment card process and technology
expertise. "e also highlighted #peed0 #implicity and #ervice as the
key drivers of growth for the #5I 2ard. #peed Eni@ue and
exclusive (F1day average turnaround time0 coupled with availability
of the #5I 2ard in B* cities in just (8 months. #implicity #imple
application process with minimum documentation. #ervice BF hours
a dayM: days a week local call access to the #5I 2ard "elp line
across B* cities. As a result of the focus on the #peed0 #implicity
and #ervice growth platform0 #5I 2ards today offers the largest
distribution and widest cash advance network for India,s middle
class customers. #5I 2ardholders can access cash for emergency
purposes from over (*; #5I branches across 8; locations in India.
In their attempt to increase their market share0 credit card
companies are opting for !irect #ales Agents. 'hese !#As are paid
a flat rate against the approved applications. 'he !#A team
comprises aggressive salesmen who visit different organiGations
and professionals. 'hey collect filled forms and produce them to the
bank for approval. After cards are issued they also deliver the same
to the individuals.
!ow much is the joining fee and the annual fee"
$enerally0 a card with a higher annual fee enjoys more benefits like
higher credit limit0 higher accident insurance cover0 accessibility to
airport lounges0 travel discounts etc. AK at least the used to be the
case. 6ith cutthroat competition between the card issuing banks0
players are ready to waive joining fees and also one1year
membership fees for anyone. $rab these offers0 or negotiate this for
!ow much is the #dd-on card fee"
If you are interested in buying add1on cards for your children0
spouse or friend0 ask for the add1on card fee. emember that you
will be settling the bills on the add1on card that you so touchingly
gift to someone dear to you 1 the statement will come to you0 and
the responsibility for payment is yours %as far as the credit card
company is concerned&
$hat is the interest rate"
'his is actually a @uestion that you should be asking fairly soon in
the discussion. emember0 while the up front one off fees are bread
and butter for the credit card 2ompany0 this is the jam> If you are
the sort who forgets to pay on time0 or likes to live it up and live off
credit0 the interest rate would be of paramount importance. Most
credit card companies charge anywhere between BJ to C J per
month. %ead a whopping C*J to FCJ per year&. 'hat<s where they
make their gravy0 and that<s where you pay> It is always advisable to
pay off the entire amount on due date0 or0 if you have a large bank
balance0 look for card companies that provide the transfer balance
facility. 'he balance transfer rate is lower for a certain period %say
six months& and then the normal rates apply. 5ut again this is a
temporary solution to a chronic problem.
% $hat is the reach"
-ot an important @uestion 1 most outlets in India accept both the
Master card and the Visa card0 and most credit card companies
provide Visa or Master cards. #o its fairly simple0 and doesn,t need
much head scratching 1 they<re all more or less the same. Ane thing
you could do is to check out for the Automated 'eller Machines
nearest to your house or work place %A'Ms 1 almost all credit card
companies now provide you the facility of withdrawing cash from
machines 1 I guess for things that cards just cant buy. 'hese
machines are called A'Ms0 and are helpfully scattered all over the
cityMcountryMworld&. "aving more A'M outlets in 'hailand
wouldn,t be of any relevance to a person who rarely travels abroad0
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 VisaM Master chain0 and have a separate chain of outlets where
it,s accepted.
5.Is it a &lobal card"
-ow this could be useful to you if you are an overseas traveler. A
$lobal card can be used for paying expenses in foreign currency
just like you use a credit card to pay in rupees. -owadays0 a $lobal
card is being issued at the same cost as for a similar domestic one. It
is better to have a global card0 especially if there is no premium
6.!ow useful are branded or affinity cards"
A partnership between a card issuer and the non1profit0 social or
lifestyle association is what results in an affinity card. 'his is for
providing financial rewards to the group or association. 4.g.
2itibank 6omen,s card0 2itibank 66K cards. 2itibank 66K Visa
card donates a percentage of the transaction value made through the
card to the 66K fund for its environmental conservation activities.
A subscription to such cards helps ease the conscience though it
provides no monetary value.
A partnership between a bank card issuer and a commercial partner
result in a co1branded card. 'his entitles the cardholder to lots of
freebies0 priGes0 discounts on co1branded products. 9ogicN If a
customer is loyal to one brand0 he will want to purchase the other.
#o if you were loyal to a particular brand0 it would make sense
going for those co1branded cards. e.g. 2itibank and IA20 5ank of
India and 'aj group of hotels etc.
7. $hat's the lost card liability?
Most 2ard issuers mention in the brochures that lost card liability is
s (+++. 5e careful0 that is actually AK'4 it is reported to the
5ank. 'he liability is actually unlimited before reporting %in cases
like this0 you would actually thank the credit limit because though
the liability is unlimited0 the ceiling should logically be your credit
limit0 and the outlets accepting your stolen card should actually
check that you %or the person who stole your card& haven,t exceeded
your credit limit&. Avoid banks that make you liable for card misuse
for a single minute after reporting it.
8. #re there any freebies"
2itibank gives a Pond,s gift hamper free on subscription to its
2itibank 6omen card. Personal accident insurance for Air0 oad or
Atherwise is packaged along with the subscription. Also 5aggage
cover0 Purchase Protection cover and credit shield is bundled free of
cost along with the card. If you feel one these parameters are
important0 and then settle for the one that gives a higher cover.
9. Is immediate cash withdrawal (ossible"
2heck out if the 5ank has any A'Ms near your house or workplace.
'his surely helps in times of emergency. 'he cost component for a
cash withdrawal could be classified as followsN #ervice fee
%transaction fee& each time you pull out money0 and Interest rate for
the period for which you have used the money 1 until settlement
date. If you are going to withdraw cash fre@uently0 better watch out
for this cost.
10. !ow long is the free credit (eriod"
'he days of credit one gets depends on the statement date and the
date of transaction. An an average0 you could assume you<d get
around B+ days of free credit. "owever0 if you buy just after the
statement date0 you could end up getting unto *+ days of credit.
9ook for cards that give you the highest free credit period>
11. Is a !el(line available"
A BF1hour "elpline service from the 2ard 2ompany helps the
cardholders during the non1banking hours. eporting of theft0
checking of available credit limit and other en@uiries can be made
by the cardholder round1the1clock. In the end0 like everything else
in life0 the card you want is really up to you 1 what matters the most
to you 1 credit0 reach0 the freebees0 international reach or a
combination of parameters. Ese our card category on the left bar to
simply list out the names of the cards0 or choose by bank name and
see the cards they offer. Ar look for cards offering the lowest
interest rate. Af the lowest charges on cash withdrawal %believe me0
it gets to be a serious consideration as one goes along&. $o to our
shortlist card section0 and search for cards based on any criteria that
you want. "appy hunting0 and stay careful 1 you may like to use our
section on how to use the card carefully to minimiGe the chance of
its misuse by someone else.
#tudy is the one of the important parts of any study. Kollowing
are the objectives of the studyN 1
'o find the scope of the credit cards industry in India.
'o know the customer awareness regarding credit cards.
'o analysis the benefits of credit cards.
'o know how it is beneficial to manage the cash risk.
'o understand the market potential of credit card in !elhi.
'he study on 2redit card1 increase the volume of profit of this
industry. 6e have considered geographical Enit of !elhi. It in we
analysis the comparison of different credit cards and their detail
reports their branches and values.

2onfining our study to the geographical limits of !elhi0 we chose
a sample of (++ people 1 *+ cardholders and *+ non1card users0 using the
probability sampling techni@ue where every individual fulfilling the
above criteria had an e@ual chance of being selected for the survey.
Kollowing are some of the facts that were revealed through the survey.
S+(!-" a'# M"th+# +) Data C+%%"-ti+'
'he data on the present study will be collected by the
investigator himself. It<s customary to distinguish data between
primary and secondary.
C+%%"-ti+' +) P!i&a!1 Data6
'he collection of primary data done with the help of personal
meet with the Managing !irector and #upervisory and Afficial #taff
after #ecuritiGation of records maintained.
A personal survey and surprise check are prompt to be carried
out to ascertain the fact on the basis of survey of credit card at
personal interest.
C+%%"-ti+' +) S"-+'#a!1 Data6
-ews papers0
Press Media
R""a!-h T++%6
esearch design N 4xploratory
#ampling Enit N Area of !elhi
#ampling #iGe N (++ people1 *+ 2ash holder0 *+
non1 cash user
#ampling techni@ue N Probability #ampling
It was found that for the fre@uent travelers acceptability was the
most important criteria and was given the highest weightage
Kollowing attributes have been analyGed as per the consumer survey
'he attributes are as followsN
24!I' 9IMI'
24!I' P4IA!
M4!I2A9 A-! "A#PI'A9 #4VI24#
'he 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. 'raditionally 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. 'he companies have tried to address this
issue through promotional campaignsN
Placing of take away firms of credit card at more than a
thousand merchant establishments.
Appointing of !#As
Esing business magaGines and newspapers for advertisement.
Mailing of forms along with contests to professionals and
middle management executives etc.
'apping the get member route
educing their minimum eligibility criteria and changing
income documentation structure.
Introduction of photo cards.
'ying up with durable consumer goods manufacturer % e.g.
Anida0 +Philips & to sell their products.
Providing A'M facility to their card holders
'ravel assistance via tele1banking.
2ard Issuers 5rand 2ard 'ype Acceptance
2itibank -A $oldMPreferred Master International
2itibank -A $oldMPreferred Visa International
2itibank -A Indian Ail Master !omestic
2itibank -A #ilverM2lassic Master International
2itibank -A #ilverM2lassic Visa International
2itibank -A 6omen Visa !omestic
2itibank -A 66K Visa !omestic
I2I2I #olid $old Visa International
I2I2I #terling #ilver Visa !omestic
I2I2I 'rue 5lue Visa !omestic
#5I 2lassic Visa !omestic
#tandard 2hartered 2lassic Master International
#tandard 2hartered $old Visa International
6ith the credit card truly becoming an international citiGen0 issuers
have begun highlighting the value1added features offered along
with the basic product. 6hile some of them are offering attractive
interest rates0 others are luring customers by their reward schemes.
6ith a plethora of choices on offer it is not easy to come to a
decision on any particular card.

F""4h"a*1 )+!"i,' t!a'a-ti+'
Many major credit card issuers charge a fee for card transactions in
foreign countries. 'he cost of cash advances is particularly onerous.
6hen traveling abroad0 carry a mix of plastic0 cash0 debit cards and
traveler<s checks.
Wa't a ."tt"! !at"$
Iust ask for Ac@uiring new credit card customers is expensive and
time1consuming0 so issuers don<t want to lose creditworthy
individuals. If you<ve had a year of on1time payments0 call your
credit card issuer and ask for a cut on your interest rate.
C(t -!"#it -a!# -+t
Make payments on time0 avoid cash advances and don<t exceed your
credit limit. 2ash advances are more costly as there<s no grace
period0 so you pay interest from the day you take the money.
I#"'tit1 th")t
'he -o. ( identity theft is credit card fraud. -ew card accounts are
opened or existing accounts are taken over. 'he Kederal 'rade
2ommission offers a hotline and 6eb site for advice and tips.
Sa*" t!" 7ith %" #".t
'he stress of credit card debt has been directly linked to physical
problems like heart attacks0 insomnia0 explosive emotions0 smoking0
overeating and lack of concentration.
Sh+8 +'%i'" 7ith+(t th" 7+!!1
2redit card companies are switching to Gero liability. If your credit
card is misused on the Internet0 you won<t be liable for online
transactions charged by an unauthoriGed user. 5ut Gero liability
doesn<t mean Gero responsibility 11 you<ll have to meet certain
F!a(# a%"!t
Placing a fraud alert on your credit files prevents an imposter
opening credit in your name. 'he downside is that you give up the
convenience of Oinstant credit.O /ou can<t sign up for a new credit
card and go shopping with it three minutes later.
T""' -+'(&"!
2redit card companies are targeting the increasingly powerful teen
consumer. 'eens get the credit card and the bill0 but parents are
legally responsible. -onprofit organiGations caution that teens lack
personal finance teaching0 and aren<t ready for plastic.
B" -a!")(% 7h"' 1+( #+ th" -a!# h+8
2hanging credit cards for a better deal may net attractive teaser
rates0 but many cards now deter balance transfers with tough terms
and high costs. ead the fine print carefully.
Si%"'-i', 8h+'" +%i-it+!6
/ou can pull the plug on telemarketers calling your home. 'he
'elephone 2onsumer Protection Act re@uires telemarketers to
record your <do1not1call< re@uest and refrain from dialing you for (+
C!"#it -+!"
!uring and after a divorce0 you need to make a clean financial
break to keep your credit report accurate. A first step is to cancel
credit card accounts0 even if you were only an authoriGed user0 and
reapply for new accounts.
Di,ita% 7a%%"t
!igital wallets0 or e1wallets0 are extensions of a consumer<s credit
cards. 5asic e1wallets store cardholder information0 filling in
account and personal information at cyber stores. 'hey are
convenient0 secure solution to shopping online.
D+':t )i%% (8 +' ,a+%i'" -!"#it -a!#
$as company cards offering rebates on purchases can be
worthwhile when gas prices are high. 5ut the annual percentage rate
and the annual fee charged are higher than normal cards. People
who carry a revolving balance will find these cards much less
C!"#it ('i+' -a!#
2redit unions usually have lower interest rates and fees than banks0
though they tend to have fewer choices than bankcards.
St(#"'t -!"#it -a!# -h+i-"
#tudents and their families looking for the best student credit card
need to focus primarily on annual fees and interest rates. $enerally0
students with a work and credit history will find a regular credit
card is the best deal.
Va!ia.%"4!at" -a!#
'he cost of using credit cards has increased. Variable1rate cards0 the
most common type in the nation0 tend to rise in step with the prime
rate. 'he prime rate has gone in the Ked<s efforts to cool the red1hot
economy0 but spending hasn<t been significantly reduced.
Fi'a'-i', *a-ati+'
Most people finance vacations with their credit cards. 4ven the
average credit card interest rate can turn your vacation into a
financial strain if you spend above your means and take up to a year
to pay it off.
E&"!,i', -!"#it
'weeners ? people with emerging credit or recovering credit 11 can
find good credit card deals. 'o get the best deal they need
to compare annual percentage rates0 grace periods0 credit
limits0 and fees0 and avoid credit cards with hefty
application and processing fees.
A))i'it1 -!"#it -a!#
Affinity credit cards %aka OcharityO cards& may give you a sense of
purpose to your spending0 but can cost more than your
actual donation. Affinity cards carry high interest rates
and annual fees. 'hey have more value if you don<t carry
a card balance.
Pa1i', )+! *a-ati+'
/ou can enjoy that vacation even after it<s over by limiting your
credit card use. 2onsider planning ahead0 setting a
budget and saving for your vacation. If you<re still short1
funded0 a home1e@uity loan offers a better interest rate
than a credit card.
St(#"'t %+a' #".t
$raduating college students face an average loan debt of more than
DC*0+++0 and it needs to be attacked aggressively. Kirst0
concentrate on paying down credit card debt0 and then
tackle your student loan debt.

Citi.a'< = -!"#it -a!# #".t "%i&i'ati+' t!at",i"
In addition to encouraging credit card competition through
promoting the most attractive cards in the country0 2itibank help
consumers cope with credit card debt by teaching various debt
reduction strategies. 6e hope that you find the following tips
I't"!"t Rat" A7a!"'"6
6e cannot stress enough the importance of being aware of interest
rates when using your card%s&. Please utiliGe the lists above>>> "igh
rate cards can be put a 5I$ dent in your pocketbook. 'o illustrate
our point again0 a cardholder with an average balance of DB0*++ and
a ().))J purchase rate will pay D(+++.++ in interest alone in just
two years> 'he same cardholder would pay only DF++.++ in interest
if the rate were lowered to ;.++J0 a difference of D8++.++> Also0 be
aware of cash advance rates. 2ash 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&. 'herefore0 avoid
cash advances if at all possible.
Ta<i', A#*a'ta," +) P!+&+ Rat"
6hile introductory or Oteaser ratesO are generally short lived and are
intended strictly to entice consumers0 savvy consumers can benefit a
great deal from promotional rates. 9ook for cards that offer longer
term introductory rates and longer term promotional rates on balance
transfers %81(B months&. #ome 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> 2onsumers that
have more than one card with available credit can transfer balances
between cards in order to take advantage of promo. 'ransfer rates %a
ploy known as Ocard dumpingO&. Kinally0 when the promo. rate
period ends %for transfers&0 it is a good idea to call the card company
and re@uest an extension of the rate. 2onsumers with a good
payment history often get extensions. /ou must be aggressive when
dealing with credit card companies> /ou can also negotiate to have
your regular interest rate lowered. 'hreatening to pay off a given
card often puts consumers in a bargaining position when dealing
with credit card cos.
A*+i#i', th" Mi'i&(& Pa1&"'t Pit)a%%6
Ane of the greatest card pitfalls is making only the minimum
payment each month. Make every effort to pay over the minimum
each month0 even if it is only a few dollars over. 'he long1term
impact of making Ojust the minimum paymentO is devastating.
According to 2onsumer 2redit 2ounseling #ervices0 paying the D8+
minimum payment on a DC0+++ credit card balance would take eight
years to pay off and would translate into DB0:;+ in interest> 5y
paying only D*+ more a month0 however0 the debt would be paid off
in three years and result in a savings of D(0;++ in interest charges>
G!a-"%" G!a-" P"!i+#6
Avoid cards that begin computing their grace period at the time of
purchases0 rather than billing. Anly a few cards still use this method
of interest computing0 but there are still some out there. Heep your
eyes peeled>
6henever Internet transactions are discussed0 immediately the
thought of credit card comes to everybody,s mind. 'his is because
in E# the payments by credit a card is @uite common. 4ven before
online purchases have become popular0 normally purchases are
made through credit cards only. 'herefore in E# there was no
problem in making people to switch over to online purchases as this
mode of payment is already in vogue. 4ven in E#0 much discussion
is going on as to how to avoid frauds0 misappropriation0 etc of
credit cards once the card number is given online to a merchant.
4ncryption technologies. #ecure socket layers0 etc are being
introduced to avoid such things In spite of all these measures0 still
reports keep coming regarding credit card frauds here and there. In
other words0 there is no (++J foolproof to make credit card
payment a safe mode of payment.
In other countries0 where credit cards payment system is not as
popular as E#0 online shopping through credit cards resulted in
great failures. At least in #ingapore0 a mega shop had experienced a
fraud of huge magnitude and decided to suspend immediately their
online business. #imilar stories are not uncommon in other
countries too.
S-"'a!i+ i' I'#ia
In India the situation is far from satisfactory to use the credit cards
as a means of making payments for online purchases for the
following reasons.
(.Ese of credit cards is popular to only a few thousands of
executives0 businessmen0 etc from big cities.
B.'hat any person using credit card is liable to declare I' made
many people surrendering their cards. In other words if credit card
is made the payment mechanism0 only I' payers will be eligible to
buy goods online.
C.#till many leading credit card companies are yet to install their
infrastructure to process the online payments.
F.'hen there is the @uestion of sales tax laws 4ach #tate has its own
rate of tax structure for each and every commodity. "ow to charge
tax when a transaction takes place online and at what rate will pose
problems of billing.
*.Many establishments do not like to offer credit card facility
due to the service charges to be paid to cr card companies. 'hey get
the payment only after a certain period of time once the goods are
sold. 5oth of them make the profit margin less.
As mentioned earlier0 the fraud element is applicable to India also.
In view of all these factors0 in India. Ese of credit cards cannot be
expected to boost the sales of online sales0 particularly business to
)hen what is the way out"
'here are other methods of payments for Indian online business0
which are given belowN
Payments by electronic cashM che@ue may be made legally valid
including electronic signature .I believe once the cyber laws are
passed by $AI0 this is possible.
4ach merchantMshopper can allot a secret code number to the
existing clients %customers&. An receipt of this code number0 the
goods can be dispatched by VPP and other modes of dispatch0
which will ensure collection of payment against delivery.
"owever0 this facility can be extended only to existing
5anks should be asked to immediately create necessary facilities
for any of the aMc holders to operate the aMc through online. Ance
a purchase is made0 the aMc holder can transfer the re@uired
amount to the merchant AM2 online. 'he M42"A-' 5A-H
2A- I-'IMA'4 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.
9arge organiGations can issue authoriGation letters to each of
their employee who wants to avail the online purchasing facility
and device a mechanism through which the company itself pays
the merchant his dues. 'his would re@uire installation of
transaction servers in the companies or can be integrated with
their online business activity.
#imilarly all government establishments can device a mechanism to
enable their employees make online purchases. 'hese are all some
of the ideas to making the online purchases easier and smoother
without affecting the payment due to the shoppers.
'hey may look difficult to achieve but with proper programming
techni@ues and the use of appropriate servers0 they can be easily
achieved. In conclusion0 payment through credit cards will not
result in increasing the online shopping as generally believed. 6e
need to device different mechanisms taking into account Indian
laws0 shopper,s re@uirements0 banking practices prevalent in our
'he following are my recommendations. 'here may be other
options available as well.
(. -ever give your credit card to the company. Make payment by
che@ue instead.
B. Monitor your credit card statements.
C. If there is an unauthoriGed charge0 report it to Micro Korecasts
immediately and demand a charge reversal. 6ait several days and
then check with your credit card company to see if you received the
credit. !o not wait for your next statement to see if the credit
F. If the refund is not there0 call Micro Korecasts again. Most
importantly0 deny the charge immediately with your credit card
Kor this to be effective0 it must be done in writing0 and must be
done within 8+ days from the date you received the statement on
which the disputed charge appeared. 'his time frame is as per
federal law. I believe you are much more likely to get your money
back if the credit card company is involved.
*. eport your credit card as lostMstolen so that no further charges
can occur. /ou will get a new card within a couple of week. Many
people have done this0 including myself.
8. eport the problem to authorities as per the next section is=
Very likely
#omewhat likely
-ot sure
#omewhat unlikely
Very unlikely
'o what extent does credit card service exceed your expectations=
Very great extent
$reat extent
#ome extent
9ittle extent
Very little extent
6hich of the following statements0 according to you most
representative of your credit card service provider=
'hey are "elpful and Kriendly.
'hey are polite0 cheerful and are knowledgeable operators
In tune with the needs of its clients
Prompt in dealing with customer complaints
Enwilling to go the extra mile for its customers
Poor customer phone support
/ou are often put on hold for a long time
"ow satisfied are you with the efficiency of call handling when
placing calls to credit card service provider=
Very satisfied
#omewhat satisfied
#omewhat dissatisfied
Very dissatisfied
2redit card service provider understands my service needs.
#trongly agree
-eutralM-ot sure
#trongly disagree.
6hat are the added benefits you wish to ac@uire from the card=
9onger credit period
"igher credit limit
9esser charges
5etter offers
Please rank the services of the following card issuers in order of
your preference.
5ank of 5aroda
5ank Af India
#tandard 2hartered
A-P $rindlays
'imes card
Personal detailsN
IncomeN (*0+++1B*0+++ B*0+++1F+0+++
F+0+++18+0+++ Above 8+0+++
)han* you for ta*ing the time to com(lete this survey
Marketing managementN Philip Hotler
Kinancial ManagementN Hhan 7 jain
5usiness #tatisticsN H.H.Hhanna 7 Iagjit #ingh
Annual report #5I
Annual report I2I2I
Annual report 2itibank
Annual report KI22I
Ph!. "ouse library
IAMIA MI99IA I#9IMIA library
$oogle search
/ahoo search
AltaVista search
M#- search
MAMA search
5usiness today
5usiness week
'imes of India
5usiness world
5usiness India
India today
A7m magaGine
#trategic marketing magaGine
4conomic times
Kinancial times
'imes of India
"industan times
Indian express
'he "indu
"ome trade search
#trategic managementN P.H.$hosh
5rand managementN /..Morthi
'he banks battle today is more with cash than with other banks.
2onsidering the huge potential of the Indian market0 it is in the
interest of the issuers to educate the consumers about the benefits of
holding credit card. 'he campaigns must also be convincing enough
to clear the myth that credit cards increase spending. Kocus should
be on changing non1card related spending to card related spending.
'he issuers must focus on service and pricing and must recogniGe
the importance of the billing and payment process to retain credit
card holders.
'he credit cards schemes would be successful only if they meet the
customer,s re@uirement of wider acceptability rather than fringe
benefits like non1crisis credit or prestige proposition. 4mphasis
should be on offering a wider basket of services through credit
cards enabling purchases for a wide variety of products along with
A'M usage0 backed by much more comprehensive merchant
establishment network. 'he banks must also increase the number of
cardholders by reducing the initial1one time subscription fee.
'he banks should step up advertising that will help to build a brand
image and create a higher brand recall like that of 2itibank. 6ith
more and more people willing to adopt to credit cards0 banks should
undertake innovative strategies to increase card spends.
#imultaneously0 to cater to high net worth customers and those with
niche needs0 banks should provide more of premium plastic and
2A1cards that piggyback on the existing infrastructure0 but provide
holders with exclusive add1ons.
Kuture promotions could includeN 'elemarketing0 direct sales0 direct
mail0 promotional advertising through media0 common A'M
services between banks %to reduce cost of operations&0 schemes like
card carnival and sales executives contests and a plethora of
augmented services should be introduced to induce greater number
of people to adopt to plastic money.
'he study is confined to -2 only.
Most of the information is subjective data collected through
personal interaction with people transacting in the plastic money
market. As a result the personal biases of individuals could affect
the study. "owever0 to counter this the data has been verified
from a number of different sources to give it a measure of
#tudy was constrained by limited availability of data. -ot all
banks could reveal their confidential marketing strategies and
statistical information.