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"A STUDY ON CREDIT CARD"
(THE PLASTIC MONEY)
Submitted in partial fulfillment of the requirement of Bachelor Of International Business & Finance, Jamia Millia Islamia, University, New Delhi-110025
Submitted by: ZOFAIL HASSAN
SESSION :- 2009-2011
DEPARTMENT OF COMMERCE AND BUSINESS STUDIES
JAMIA MILLIA ISLIMIA UNIVERSITY NEW DELHI-110025
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 observations. I am very indebted and obliged to have Ms. VARDHA SAGHIR (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 report. I am also placed my sincere thanks to all respondents and concerned people to this project.
EXECUTIVE SUMMARY OF CREDIT CARD INDUSTRY INTRODUCTION TYPES OF CARDS SALIENT FEATURES OBJECTIVES & SCOPE OF THE STUDY RESEARCH METHODOLOGY
INDIAN CREDIT CARD SCENARIO
DECIDING ON THE RIGHT CREDIT CARD ANALYSIS COMPARISON OF CREDIT CARDS SUGGESTIONS OF THE STUDY LIMITATIONS OF THE STUDY CONCLUSION RECOMMENDATION BIBLIOGRAPHY QUESTIONNAIRE
ORIGIN The credit card had its beginning in an embarrassing incident that took place in the early 1950’s 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 of today’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 member’s purchases but the members also paid an annual subscription fee. Diners Club vetted its members for credit
white and gold Bank America card to at any accepting merchant establishments around the globe. later renamed Master Charge and later still Master Card. Thus was born the first ‘Travel and Entertainment Card’. and by 1959 by Carte Blanche. In the present time American Express leads the travel and entertainment (T&E) card industry. It was followed by American Express. after many vicissitudes is now a part of Citi Bank Empire Together With Diners Club. which in other banks. The next great leap-forward came from Bank of America. Ever since Master Card and Visa and their affiliates have carved the world credit card market. a rival group of American Banks came together in 1966 under the name of Interbank.worthiness and guaranteed payment to participating establishment. Such cardholders could use their card 1966 offered to license its successful blue. Later in 1977 all the national and international Bank America licenses were pulled together under the single name of Visa. . Not to be outdone. which is now a dominant force in the Travel and Entertainment cards industry.
(Remember the SALE at your favorite ready-mades store?).In the 1980s credit card concept was launched in India through the Diners Club card. it says things about you.to be extended credit! So. you run short of it. but more importantly. risky and sometimes. when you get yourself a card.It's credit to you!” A Credit Card is referred to as 'plastic money'. Besides. Most people associate a credit card with a prestige. and soon. within a couple of months both Visa and Master card entered into the Indian market. It is a convenient and safe alternative for cash. remember that. A Credit card is the smart solution to these problems. What is a Credit Card? “Credit Cards . which it most certainly bestows on you. it says that you have taken the onus of being responsible . just when you most need it. Carrying a lot of cash on you can be cumbersome. because your bank does! .
Annual fee – A bank charge for use of a credit card levied each year. Banks. Credit limit – The maximum amount of charges a cardholder may apply to the account. which can be used more than once to borrow money or buy products and services on credit.An agreement to lend a specific amount to a borrower and to allow that amount to be borrowed again once it has been repaid. Banks usually take an initial fixed amount in the first year and then a lower amount as yearly renewal fees. which ranges depending upon the type of card one possesses. retail stores and other businesses generally issue these. Most credit cards offer revolving credit. why not become familiar with the various terms and jargons used by the credit card industry. .Before i go any further. Credit Card – A credit card is a financial instrument. Revolving Line Of Credit .
some cards require a number to be punched into a keypad before a transaction can be completed. incomes and credit reports.Personal Identification Number (PIN) . Joint Credit . .Often called the introductory rate.Issued to a couple based on both of their assets. It generally results in a higher credit limit.As a security measure. but makes both parties responsible for repaying the debt. it is the belowmarket interest rate offered to entice customers to switch credit cards. The cardholder can usually change the number. Teaser Rate .
the other a non-financial group.000 financial institutions in 220 countries and territories issue its products.TYPES OF CARDS MasterCard – MasterCard is a product of MasterCard International and along with VISA are distributed by financial institutions around the world. one a lending institution. 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 MasterCard. . Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards. In 1998. 23. it had almost 700 million cards in circulation. Affinity Cards . Schools. A VISA 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. Cardholders borrow money against a line of credit and pay it back with interest if the balance is carried over from month to month.A card offered by two organizations.
Usually. . pro wrestlers. issuers provide extra perks or incentives to cardholders. In addition. Titanium Card – A card with an even higher limit than a platinum card. Gold Card/Executive Card – A credit card that offers a higher line of credit than a standard card. Platinum Card – A credit card with a higher limit and additional perks than a gold card.non-profit groups. popular singers and airlines are among those featured on affinity cards. use of the card entitles holders to special discounts or deals from the non-financial group. Standard Card – It is the most basic card (sans all frills) offered by issuers. Classic Card – Brand name for the standard card issued by VISA. Income eligibility is also higher.
It is used by people new to credit. contain a computer chip embedded in the plastic. or people trying to rebuild their poor credit ratings. When read by a special terminal. Smart Card – Smart cards. Where a typical credit card's magnetic stripe can hold only a few dozen characters. or used as ID cards with stored-in passwords. smart cards are now available with 16K of memory. These cards can be used as cash cards or as credit cards with a preset credit limit. No . sometimes called chip cards. Works like the latter and you don't have to be an accountholder. Secured Card – A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. Charge Card – fall between a debit and credit card. Just pay up in full when the bill arrives with the mail. the cards can perform a number of functions or access data stored in the chip.
no revolving credit facility either. Stan chart and Hindustan Lever Limited have a co-branded card to sell Aviance beauty products. similar to pre-paid phone cards. The cards . SBI-GE Capital has a co-branded card for retail loans. merchandise or services based on card usage. Specific facilities are made to members through these tie-ups. So. in other words. which can be read by a special cash card reader. Cash Card – Cash cards. Rebate Card – This is a card that allows the customer to accumulate cash. Co-Branded Card – This is a marriage of convenience between two service providers who want a trade-off with the other's strengths. Participating retailers will use the reader to debit the card in increments until the value is gone. American Express and Diners are providers.outstanding are allowed. Times Bank and Citibank have a co-branded card that allows concessional rates for add-on cards or telephone banking. contain a set amount of value.
so if lost or stolen. and payments for purchases are deducted from your bank account.they have no built-in security. Travel Card – these works mostly as debit cards for the limited purpose of travel. . they can be used by anyone. you enter the personal identification number on a PIN pad and the money is immediately debited at the bank. Open an account with a bank that offers a debit card. Citibank and a few domestic banks like Times Bank offer this. The retailer swipes the card over an electronic terminal at his outlet. American Express. Citibank Dollar Card. Debit Card – It is the accountholder's mobile ATM.are like cash -. Bob card Global and Hong bank Thomas Cook International Card are among the players in this section.
the rest is carried forward. As a privilege. and not the calendar year.interest! Normally. every month. is your membership year. Forwarding Balance (or Revolving): The most attractive feature of a credit card is that you need not pay off your dues in whole.SALIENT FEATURES Annual Fee: All credit card issuers charge an annual fee which is payable at the start of the year. interest varies between 2. you can expect to be billed the annual fee every March until you cancel your card. . But there's a price to pay for this extended credit . The start of the year. When the time comes for renewal of your card. you can even use the reward points you have accumulated from using the credit card over the year to settle your annual fee. of course. this fee is sometimes waived the first time. if you got yourself a card in March.5% and 3% per month. So. You can opt to pay 5% of the total amount on or before the due date.
it turns out to be as high as 43%. Use discretion when withdrawing cash on your credit card because the charges for this facility are high. but when you look at the interest rate over the year. around 2.lets you withdraw cash from designated ATMs using your credit card. Cash Advance: An important feature . It might sound low at 3%. APR or Annual percentage Rate: The interest rate that reflects the yearly cost of the interest the outstanding on your card is called the annual percentage rate. Most card issuers will tell you their monthly rate of interest.5% to 3% per transaction! BENEFITS: Credit: . This rate is charged to the cardholder on the amounts carried forward beyond the due date for the payment of balances.
there's a fee to it. pay later. It typically starts with a flat fee going up to a percentage-based fee on the amount of the withdrawal. Billing cycles are structured in such a way that you definitely get at least 30 days out of these as clean credit time. you get an interest-free period of 45 days. you don't need to run the risk of carrying a lot of cash. 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. Convenience: With a credit card on you. Better still. . Cash Advance: Another advantage of a Credit card is that you can use it as an ATM card too! But remember.When you use a Credit card to pay for anything. every month. You can spend now . which is especially beneficial to salaried people.
Remember. a timely help in an emergency or taking advantage of an opportunity that you would have otherwise lost out on.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 caution. like an investment! . it is an extremely expensive way to borrow money! View it as a convenient and safe way to carry cash.
should the need arise.Do's & Dont's Do not leave your Credit Card lying around the house or on your desk at work. really need to! . or you suspect it is being used fraudulently. And when you want to throw them away. unless you've made the call. Never give your Credit Card number over the phone. keep your receipts filed or in one place . shred or tear them before you do.you'll find them easily. Hold on to receipts from your transactions. and it is to your bank or someone you trust. In fact. and you really. report it immediately to your bank. don't just thrash into the bin. If your card is lost or stolen.
helps you to be sure that your business measures up to their expectations. Getting your customers to tell you what’s good about your business. Customer satisfaction is the key to success. . 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. your business will prosper. There has been a seven-fold increase. 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. but the usage pattern of credit cards remains a point of conc0ern. with the number of cardholders touching over 38 lakh. You want customers to be happy with the products and services you provide. and where you need improvement.EXECUTIVE SUMMARY OF CREDIT CARD INDUSTRY The credit card industry in India has registered an encouraging growth in recent times. those in the industry say. If they feel they have received good value for their money.
.Apart from attracting potential card users. With the influx of new financial institutions in the card market. customer retention is also one of the most important factors influencing a card issuer’s success. ----. The level of services provided by these organizations is increasing day by day. people have started using cards on a more regular basis. This research has tried to study the satisfaction levels of a sample of 100 credit card holders. which may be of different kinds. These respondents each hold credit cards. 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.
those in the industry say. But it is the usability that raises doubts. According to a survey by the Credit Card & Management Consultancy (CCMC). The whole idea behind the introduction . 71 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. This fortifies the view that conservative purchasing ideas are giving way to the big in-thing. There has been a seven-fold increase. Seven years back. 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. 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 cards.INDIAN CREDIT CARD SCENARIO The credit card industry in India has registered an encouraging growth in recent times. but the usage pattern of credit cards remains a point of concern. with the number of cardholders touching over 38 lakh. India had a base of around five lakh credit cards.
The markets like the United States and England have an average annual card spend of 1. When one uses the card. The Standard Chartered Bank has seen its credit card base shoot up after the launch of its Global Rupee Card in March last year. The banks that issue the cards have made it abundantly clear that one has to look out for him. it is entirely his responsibility to make sure that exchange controls have been complied with. The innovations have already begun to show their effect. The credit card players will have to think about simplifying the foreign exchange transactions. It has seen the fresh issuance of global card increase by more than one lakh. Going by estimates. It is upon him to . With this in mind.of the credit cards was to increase the purchasing capacity of the cardholder.300 and 3. the foreign banks launched a credit card blitzkrieg on the Indian customer. India has a long way to be anywhere near the matured markets. But the real challenge for the banks is to make the holder spend more on the card. and the bank now has a base of more than half a billion.600 dollars respectively.
500). The leaders will surely be identified by the innovations for the card users. in India it is only 11 times. 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. Suggestions include credit card usage at petrol pumps and railway bookings.154). it is about 678 dollars (Rs 29.find out the facts of regulatory life. wide geographical spread. and the fact is the foreign banks are clearly the leaders. The real point of worry is the spending on the credit cards. Those in the credit card business say that per capita credit card spending in India is about five hundred dollars (Rs 21. limited telecommunication infrastructure and emerging regulatory controls. Some of the key factors impacting the cards business in India are limited credit. the average card spending in India is even less than that in Indonesia. The other players feel that the card acceptance base in India has to be widened. . whereas in Indonesia. According to estimates. At present there are over a dozen players in the credit card market in India.
the players feel that the business has not reached an optimum level to say that they are making money. more than ten per cent of them are cardholders.They also point out that though the cards business has been in the country for long. Though LIC is talking about the introduction of this facility to customers. despite the fact that it has more than one million credit card holders. Even the largest player in the Indian market does not still have the economies to make the card business really profitable in India. Those in the industry point out that this figure is not bad. Less than two per cent of private consumption spending in India is done on cards. with many loopholes remaining to be plugged. the cards business is still in its initial stages. Of the twenty million taxpayers in India. but even today the insurance premium cannot be paid by card. considering the fact that. However. but its turning into reality may take time. There is talk of widening the card business with new features. . but the present scenario does not paint a positive picture.
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 and infrastructure are, therefore, a necessity. The increase is being 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 this 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 past couple of years. For instance, the Hong Kong & Shanghai Banking Corporation (HSBC), was in the credit cards business since seven years, but from 50,000 card holders in 1997, it has about three lakh card holders now. India’s fastest growing credit card company - SBI Cards 2.5 lakh credit cards…25 cities…16 months. The joint venture between India’s largest bank – State Bank of India and one of the world’s leading financial services companies – GE Capital, SBI Cards &
Payment Services (SBI Cards) has issued 2.5 lakh credit cards across 25 cities (the largest distribution network in the payment card industry) within 16 months. Thereby achieving the target in the fastest period seen in India’s payment card industry. SBI Cards & Payments Services attributed this success to SBI’s enormous brand equity, and unparalleled retail branch network coupled with GE Capital’s payment card process and technology expertise. He also highlighted Speed, Simplicity and Service as the key drivers of growth for the SBI Card. Speed Unique and 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 day/7 days a week local call access to the SBI Card Help line across 25 cities. As a result of the focus on the Speed, Simplicity and Service growth platform, SBI Cards today offers the largest distribution and widest cash advance network for India’s middle class customers. SBI Cardholders can access cash for emergency purposes from over 158 SBI branches across 68 locations in India.
INTERMEDIARIES: In their attempt to increase their market share, credit card companies are opting for Direct Sales Agents. These DSAs are paid a flat rate against the approved applications. The DSA team comprises aggressive salesmen who visit different organizations and professionals. They collect filled forms and produce them to the bank for approval. After cards are issued they also deliver the same to the individuals. 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? If you are interested in buying add-on cards for your children, 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 the responsibility for payment is yours (as far as the credit card 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 up front 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 companies charge anywhere between 2% to 3 % per 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 to pay off the entire amount on due date, or, if you have a large bank balance, look for card companies that provide the transfer
But again this is a temporary solution to a chronic problem. So its fairly simple. Having more ATM outlets in Thailand wouldn’t be of any relevance to a person who rarely travels abroad. 4. and doesn’t need much head scratching . One thing you could do is to check out for the Automated Teller Machines nearest to your house or work place (ATMs . These machines are called ATMs. and most credit card companies provide Visa or Master cards. and are helpfully scattered all over the city/country/world).I guess for things that cards just cant buy.balance facility. What is the reach? Not an important question .they're all more or less the same. The balance transfer rate is lower for a certain period (say six months) and then the normal rates apply.most outlets in India accept both the Master card and the Visa card. 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 .almost all credit card companies now provide you the facility of withdrawing cash from machines .
A Global card can be used for paying expenses in foreign currency just like you use a credit card to pay in rupees. and have a separate chain of outlets where it’s accepted. Citibank WWF Visa card donates a percentage of the transaction value made through the card to the WWF fund for its environmental conservation activities.g. It is better to have a global card. . Citibank WWF cards. This is for providing financial rewards to the group or association. social or lifestyle association is what results in an affinity card. 5. a Global card is being issued at the same cost as for a similar domestic one.the Visa/ Master chain.How useful are branded or affinity cards? A partnership between a card issuer and the non-profit. 6. Citibank Women’s card. especially if there is no premium attached. E.Is it a Global card? Now this could be useful to you if you are an overseas traveler. Nowadays.
7. The liability is actually unlimited before reporting (in cases like this. it would make sense going for those co-branded cards. Bank of India and Taj group of hotels etc. This entitles the cardholder to lots of freebies. What’s the lost card liability? Most Card issuers mention in the brochures that lost card liability is Rs 1000. the ceiling should logically be your credit limit. So if you were loyal to a particular brand. discounts on co-branded products. prizes. e. he will want to purchase the other.g. A partnership between a bank card issuer and a commercial partner result in a co-branded card. that is actually AFTER it is reported to the Bank. Citibank and IOC. and the outlets accepting your stolen card should actually check that you (or the person who stole your card) haven’t exceeded .A subscription to such cards helps ease the conscience though it provides no monetary value. Be careful. you would actually thank the credit limit because though the liability is unlimited. Logic: If a customer is loyal to one brand.
Purchase Protection cover and credit shield is bundled free of cost along with the card. The cost component for a cash withdrawal could be classified as follows: Service fee (transaction fee) each time you pull out money. Also Baggage cover. This surely helps in times of emergency. Road or Otherwise is packaged along with the subscription. and Interest rate for the period for which you have used the money .your credit limit). If you feel one these parameters are important. Personal accident insurance for Air. 8. Avoid banks that make you liable for card misuse for a single minute after reporting it. and then settle for the one that gives a higher cover.until settlement date. Are there any freebies? Citibank gives a Pond’s gift hamper free on subscription to its Citibank Women card. 9. better watch out for this cost. . If you are going to withdraw cash frequently. Is immediate cash withdrawal possible? Check out if the Bank has any ATMs near your house or workplace.
international reach or a combination of parameters. Is a Helpline available? A 24-hour Helpline service from the Card Company helps the cardholders during the non-banking hours. Use our card category on the left bar to simply list out the names of the cards. How long is the free credit period? The days of credit one gets depends on the statement date and the date of transaction. reach. or choose by bank name and see the cards they offer. if you buy just after the statement date. you could end up getting unto 50 days of credit. like everything else in life. Look for cards that give you the highest free credit period! 11.10. the freebees. On an average. Or look for cards offering the lowest interest rate.credit. However. you could assume you'd get around 20 days of free credit. Reporting of theft. it gets to be a serious consideration as one goes along). the card you want is really up to you . Go to our . Of the lowest charges on cash withdrawal (believe me. checking of available credit limit and other enquiries can be made by the cardholder round-the-clock.what matters the most to you . In the end.
and stay careful .shortlist card section.you may like to use our section on how to use the card carefully to minimize the chance of its misuse by someone else. Happy hunting. and search for cards based on any criteria that you want. .
Following are the objectives of the study: • • • • • To find the scope of the credit cards industry in India. To know how it is beneficial to manage the cash risk.OBJECTIVES OF THE STUDY Study is the one of the important parts of any study.increase the volume of profit of this industry. SCOPE OF THE STUDY The study on Credit card. It in we analysis the comparison of different credit cards and their detail reports their branches and values. To understand the market potential of credit card in Delhi. We have considered geographical Unit of Delhi. To know the customer awareness regarding credit cards. To analysis the benefits of credit cards. .
50 cardholders and 50 non-card users.RESEARCH METHODOLOGY Confining our study to the geographical limits of Delhi. It's customary to distinguish data between primary and secondary. Following are some of the facts that were revealed through the survey. we chose a sample of 100 people . . 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. Sources and Method of Data Collection The data on the present study will be collected by the investigator himself. using the probability sampling technique where every individual fulfilling the above criteria had an equal chance of being selected for the survey. 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.
50 Cash holder.Collection of Secondary Data: • • • • News papers.cash user • Sampling technique : Probability Sampling . 50 non. Press Media Magazines Telecommunication Research Tools: • • • Research design Sampling Unit Sampling Size : : : Exploratory Area of Delhi 100 people.
ANALYSIS It was found that for the frequent travelers acceptability was the most important criteria and was given the highest weightage Following attributes have been analyzed as per the consumer survey conducted The attributes are as follows: ACCEPTIBILITY CREDIT LIMIT CREDIT PERIOD MEDICAL AND HOSPITAL SERVICES OTHERS PROMOTION STRATEGIES The changing trends in the payment systems are global and even in India revolve around the change in customer needs and the .
Appointing of DSAs Using business magazines and newspapers for advertisement. 0Philips ) to sell their products. Tapping the get member route Reducing their minimum eligibility criteria and changing income documentation structure. Onida. The companies have tried to address this issue through promotional campaigns: Placing of take away firms of credit card at more than a thousand merchant establishments. Providing ATM facility to their card holders . Introduction of photo cards.evolution of financial markets. Tying up with durable consumer goods manufacturer ( e. As a result credit card companies had to educate the consumers and spread awareness of the uses of its products. Traditionally Indians like to pay in cash or at the most avail the services of a bank. Mailing of forms along with contests to professionals and middle management executives etc.g.
. Travel assistance via tele-banking.
COMPARISON OF CREDIT CARDS Card Issuers Citibank NA Citibank NA Citibank NA Citibank NA Citibank NA Citibank NA Citibank NA ICICI ICICI ICICI Brand Gold/Preferred Gold/Preferred Indian Oil Silver/Classic Silver/Classic Women WWF Solid Gold Sterling Silver True Blue Domestic Card Type Master Visa Master Master Visa Visa Visa Visa Visa Visa Acceptance International International Domestic International International Domestic Domestic International Domestic .
. With a plethora of choices on offer it is not easy to come to a decision on any particular card.SBI Classic Visa Master Domestic Standard Chartered Classic International Standard Chartered Gold Visa International With the credit card truly becoming an international citizen. issuers have begun highlighting the value-added features offered along with the basic product. others are luring customers by their reward schemes. While some of them are offering attractive interest rates.
cash. debit cards and traveler's checks. so you pay interest from the day you take the money. so issuers don't want to lose creditworthy individuals.TIP’S FROM CITIBANK TO SAVE CHARGES Fee-heavy foreign transactions Many major credit card issuers charge a fee for card transactions in foreign countries. . Want a better rate? Just ask for Acquiring new credit card customers is expensive and time-consuming. call your credit card issuer and ask for a cut on your interest rate. If you've had a year of on-time payments. When traveling abroad. carry a mix of plastic. Cash advances are more costly as there's no grace period. Cut credit card costs Make payments on time. avoid cash advances and don't exceed your credit limit. The cost of cash advances is particularly onerous.
New card accounts are opened or existing accounts are taken over. . smoking. But zero liability doesn't mean zero responsibility -. overeating and lack of concentration. Shop online without the worry Credit card companies are switching to zero liability.Identity theft The No.you'll have to meet certain requirements. The Federal Trade Commission offers a hotline and Web site for advice and tips. insomnia. 1 identity theft is credit card fraud. you won't be liable for online transactions charged by an unauthorized user. explosive emotions. If your credit card is misused on the Internet. Save stress with less debt The stress of credit card debt has been directly linked to physical problems like heart attacks.
Read the fine print carefully. but parents are legally responsible.Fraud alert Placing a fraud alert on your credit files prevents an imposter opening credit in your name. Be careful when you do the card hop Changing credit cards for a better deal may net attractive teaser rates. Teen consumers Credit card companies are targeting the increasingly powerful teen consumer. and aren't ready for plastic. Teens get the credit card and the bill. but many cards now deter balance transfers with tough terms and high costs. ." You can't sign up for a new credit card and go shopping with it three minutes later. Nonprofit organizations caution that teens lack personal finance teaching. The downside is that you give up the convenience of "instant credit.
. secure solution to shopping online. The Telephone Consumer Protection Act requires telemarketers to record your 'do-not-call' request and refrain from dialing you for 10 years. and reapply for new accounts. Digital wallets Digital wallets. are extensions of a consumer's credit cards.Silencing phone solicitors: You can pull the plug on telemarketers calling your home. They are convenient. Basic e-wallets store cardholder information. you need to make a clean financial break to keep your credit report accurate. even if you were only an authorized user. A first step is to cancel credit card accounts. or e-wallets. Credit score During and after a divorce. filling in account and personal information at cyber stores.
. though they tend to have fewer choices than bankcards. students with a work and credit history will find a regular credit card is the best deal. Credit union cards Credit unions usually have lower interest rates and fees than banks. Generally. People who carry a revolving balance will find these cards much less rewarding. But the annual percentage rate and the annual fee charged are higher than normal cards. 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.Don't fill up on gasoline credit cards Gas company cards offering rebates on purchases can be worthwhile when gas prices are high.
tend to rise in step with the prime rate. . and avoid credit cards with hefty application and processing fees. credit limits. Emerging credit Tweeners – people with emerging credit or recovering credit -. Even 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. and fees. To get the best deal they need to compare annual percentage rates.Variable-rate cards The cost of using credit cards has increased. The prime rate has gone in the Fed's efforts to cool the red-hot economy.can find good credit card deals. but spending hasn't been significantly reduced. Financing vacations Most people finance vacations with their credit cards. grace periods. Variable-rate cards. the most common type in the nation.
Affinity cards carry high interest rates and annual fees. and then tackle your student loan debt. Consider planning ahead. Student loan debt Graduating college students face an average loan debt of more than $35. If you're still shortfunded. but can cost more than your actual donation.000. First. and it needs to be attacked aggressively.Affinity credit cards Affinity credit cards (aka "charity" cards) may give you a sense of purpose to your spending. They have more value if you don't carry a card balance. a home-equity loan offers a better interest rate than a credit card. concentrate on paying down credit card debt. Paying for vacations You can enjoy that vacation even after it's over by limiting your credit card use. setting a budget and saving for your vacation. .
00%.500 and a 19. Please utilize the lists above!!! High rate cards can be put a BIG dent in your pocketbook. To illustrate our point again.99% purchase rate will pay $1000.Citibank ‘s credit cards debt elimination strategies In addition to encouraging credit card competition through promoting the most attractive cards in the country. Citibank help consumers cope with credit card debt by teaching various debt reduction strategies.00 in interest alone in just two years! The same cardholder would pay only $400. Interest Rate Awareness: We cannot stress enough the importance of being aware of interest rates when using your card(s).00! Also.00 in interest if the rate were lowered to 8. We hope that you find the following tips beneficial. a difference of $600. Cash advance rates are typically much higher than purchase rates and usually there is no grace period for . be aware of cash advance rates. a cardholder with an average balance of $2.
You must be aggressive when dealing with credit card companies! You can also negotiate to have your regular interest rate lowered. Some cards even offer very attractive long term promotional rates on balance transfers. Transfer rates (a ploy known as "card dumping"). rate period ends (for 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. Threatening to pay off a given . savvy consumers can benefit a great deal from promotional rates. when the promo.cash advances (not to mention cash advance fees). Finally. Therefore. it is a good idea to call the card company and request an extension of the rate. Look for cards that offer longer term introductory rates and longer term promotional rates on balance transfers (6-12 months). 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. Consumers with a good payment history often get extensions..
Make every effort to pay over the minimum each month. but there are still some out there. Avoiding the Minimum Payment Pitfall: One of the greatest card pitfalls is making only the minimum payment each month. The long-term impact of making "just the minimum payment" is devastating. the debt would be paid off in three years and result in a savings of $1. even if it is only a few dollars over.800 in interest charges! Graceless Grace Period: Avoid cards that begin computing their grace period at the time of purchases. however. rather than billing.000 credit card balance would take eight years to pay off and would translate into $2. Only a few cards still use this method of interest computing. Keep your eyes peeled! . paying the $60 minimum payment on a $3.card often puts consumers in a bargaining position when dealing with credit card cos.780 in interest! By paying only $50 more a month. According to Consumer Credit Counseling Services.
misappropriation. Even in US. online shopping through credit cards resulted in great failures. a mega shop had experienced . This is because in US the payments by credit a card is quite common.CONCLUSION Whenever Internet transactions are discussed. In other countries. Even before online purchases have become popular. much discussion is going on as to how to avoid frauds. there is no 100% foolproof to make credit card payment a safe mode of payment. Therefore in US there was no problem in making people to switch over to online purchases as this mode of payment is already in vogue. etc are being introduced to avoid such things In spite of all these measures. In other words. Secure socket layers. etc of credit cards once the card number is given online to a merchant. still reports keep coming regarding credit card frauds here and there. normally purchases are made through credit cards only. At least in Singapore. immediately the thought of credit card comes to everybody’s mind. where credit cards payment system is not as popular as US. Encryption technologies.
Then there is the question of sales tax laws Each State has its own rate of tax structure for each and every commodity. 2. In other words if credit card is made the payment mechanism. How to charge . 3. 1.a fraud of huge magnitude and decided to suspend immediately their online business. 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 for the following reasons. businessmen.Use of credit cards is popular to only a few thousands of executives. Similar stories are not uncommon in other countries too. etc from big cities.Still many leading credit card companies are yet to install their infrastructure to process the online payments. only IT payers will be eligible to buy goods online. 4.That any person using credit card is liable to declare IT made many people surrendering their cards.
particularly business to customer Then what is the way out? There are other methods of payments for Indian online business. As mentioned earlier. 5. Both of them make the profit margin less. in India. the fraud element is applicable to India also. Use of credit cards cannot be expected to boost the sales of online sales.I believe once the cyber laws are passed by GOI. They get the payment only after a certain period of time once the goods are sold. In view of all these factors. this is possible.Many establishments do not like to offer credit card facility due to the service charges to be paid to cr card companies.tax when a transaction takes place online and at what rate will pose problems of billing. . which are given below: Payments by electronic cash/ cheque may be made legally valid including electronic signature .
Each merchant/shopper can allot a secret code number to the existing clients (customers). Activity can be made part of the ordering activity. the goods can be dispatched by VPP and other modes of dispatch. this facility can be extended only to existing customers. On receipt of this code number. Large organizations can issue authorization 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. However. Once a purchase is made. Banks should be asked to immediately create necessary facilities for any of the a/c holders to operate the a/c through online. The MERCHANT BANK CAN INTIMATE the shopper about the transaction. which will ensure collection of payment against delivery. All these activities can be carried out instantly though proper programming. the a/c holder can transfer the required amount to the merchant A/C online. This would require installation of .
We need to device different mechanisms taking into account Indian laws. . They may look difficult to achieve but with proper programming techniques and the use of appropriate servers. Similarly all government establishments can device a mechanism to enable their employees make online purchases. These are all some of the ideas to making the online purchases easier and smoother without affecting the payment due to the shoppers.transaction servers in the companies or can be integrated with their online business activity. In conclusion. shopper’s requirements. banking practices prevalent in our country. payment through credit cards will not result in increasing the online shopping as generally believed. they can be easily achieved.
Monitor your credit card statements. 2.RECOMMENDATIONS HOW TO PROTECT The following are my recommendations. 3. Never give your credit card to the company. Wait several days and then check with your credit card company to see if you received the credit. If there is an unauthorized charge. deny the charge immediately with your credit card company. . Most importantly. report it to Micro Forecasts immediately and demand a charge reversal. call Micro Forecasts again. There may be other options available as well. Make payment by cheque instead. 1. If the refund is not there. Do not wait for your next statement to see if the credit appears. 4.
5. 6. This time frame is as per federal law. Many people have done this. including myself. and must be done within 60 days from the date you received the statement on which the disputed charge appeared.For this to be effective. Report your credit card as lost/stolen so that no further charges can occur. Report the problem to authorities as per the next section is? Very likely Somewhat likely Not sure Somewhat unlikely Very unlikely To what extent does credit card service exceed your expectations? Very great extent . I believe you are much more likely to get your money back if the credit card company is involved. You will get a new card within a couple of week. it must be done in writing.
They are polite.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. 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 How satisfied are you with the efficiency of call handling when placing calls to credit card service provider? .
Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied Credit card service provider understands my service needs. Strongly agree Agree Neutral/Not sure Disagree Strongly disagree. What are the added benefits you wish to acquire from the card? Acceptability .
Citibank HSBC Bank of Baroda Bank Of India Standard Chartered ANZ Grindlays Times card ICICI .Longer credit period Higher credit limit Lesser charges Better offers Please rank the services of the following card issuers in order of your preference.
000 25.000-40.000 Thank you for taking the time to complete this survey .000 40.SBI Personal details: Age: Profession Income: 15.000-25.000 Above 60.000-60.
Khanna & Jagjit Singh Annual report SBI Annual report ICICI Annual report Citibank Annual report FICCI PhD.BIBLIOGRAPHY Marketing management: Philip Kotler Financial Management: Khan & jain Business Statistics: K.K. House library JAMIA MILLIA ISLIMIA library Google search Yahoo search AltaVista search .
com A&m.com Icici.com Business today Business week Times of India Business world Business India .com MAMA search Citibank.com Sbi. MSN search India infoline.com Indiatimes.
Morthi .Ghosh Brand management: Y.R.K. Outlook India today A&m magazine Strategic marketing magazine Economic times Financial times Times of India Hindustan times Indian express The Hindu Home trade search Strategic management: P.
. it is in the interest of the issuers to educate the consumers about the benefits of holding credit card. 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.SUGGESTIONS OF THE STUDY The banks battle today is more with cash than with other banks. The campaigns must also be convincing enough to clear the myth that credit cards increase spending. Considering the huge potential of the Indian market. Emphasis should be on offering a wider basket of services through credit cards enabling purchases for a wide variety of products along with ATM usage. The credit cards schemes would be successful only if they meet the customer’s requirement of wider acceptability rather than fringe benefits like non-crisis credit or prestige proposition. The issuers must focus on service and pricing and must recognize the importance of the billing and payment process to retain credit card holders. Focus should be on changing non-card related spending to card related spending.
direct mail. Simultaneously. common ATM services between banks (to reduce cost of operations).The banks should step up advertising that will help to build a brand image and create a higher brand recall like that of Citibank. but provide holders with exclusive add-ons. . Future promotions could include: Telemarketing. direct sales. to cater to high net worth customers and those with niche needs. 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. banks should provide more of premium plastic and CO-cards that piggyback on the existing infrastructure. banks should undertake innovative strategies to increase card spends. promotional advertising through media. With more and more people willing to adopt to credit cards.
• Study was constrained by limited availability of data. • Most of the information is subjective data collected through personal interaction with people transacting in the plastic money market. . Not all banks could reveal their confidential marketing strategies and statistical information. As a result the personal biases of individuals could affect the study. However.LIMITATIONS OF THE STUDY • The study is confined to NCR only. to counter this the data has been verified from a number of different sources to give it a measure of authenticity.
TYPES OF CARDS .
SALIENT FEATURES .
OBJECTIVES & SCOPE OF THE STUDY .
RESEARCH METHODOLOGY .
EXECUTIVE SUMMARY OF CREDIT CARD INDUSTRY .
INDIAN CREDIT CARD SCENARIO .
DECIDING ON THE RIGHT CREDIT CARD .
COMPARISON OF CREDIT CARDS .
LIMITATIONS OF THE STUDY .
SUGGESTIONS OF THE STUDY .
QUESTIONNAIR E .