INTRODUCTION

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 worthiness and guaranteed payment to

participating establishment. Thus, was born the first ‘Travel and

Entertainment Card’. It was followed by American Express, which is now

a dominant force in the Travel and Entertainment cards industry, and by

1959 by Carte Blanche, after many vicissitudes is now a part of Citi Bank

Empire Together With Diners Club. In the present time American

Express leads the travel and entertainment (T&E) card industry.

The next great leap-forward came from Bank of America, which in other

banks. Such cardholders could use their card 1966 offered to license its

successful blue, white and gold Bank America card to at any accepting

merchant establishments around the globe. Later in 1977 all the national

and international Bank America licenses were pulled together under the

single name of Visa.

Not to be outdone, a rival group of American Banks came together in

1966 under the name of Interbank, later renamed Master Charge and later

still Master Card. Ever since Master Card and Visa and their affiliates

have carved the world credit card market.

In the 1980s credit card concept was launched in India through the

Diners Club card, and soon, within a couple of months both Visa and

Master card entered into the Indian market.

What is a Credit Card?

“Credit Cards - It's credit to you!”

A Credit Card is referred to as 'plastic money'. Carrying a lot of cash on

you can be cumbersome, risky and sometimes, you run short of it, just

when you most need it. (Remember the SALE at your favorite ready-

mades store?). A Credit card is the smart solution to these problems. It is

a convenient and safe alternative for cash.

Besides, it says things about you. Most people associate a credit card with

a prestige, which it most certainly bestows on you, but more importantly,

it says that you have taken the onus of being responsible - to be extended

credit! So, when you get yourself a card, remember that, because your

bank does!
Before i go any further, why not become familiar with the various terms

and jargons used by the credit card industry.

Credit Card – A credit card is a financial instrument, which can be used

more than once to borrow money or buy products and services on credit.

Banks, retail stores and other businesses generally issue these.

Credit limit – The maximum amount of charges a cardholder may apply

to the account.

Annual fee – A bank charge for use of a credit card levied each year,

which ranges depending upon the type of card one possesses. Banks

usually take an initial fixed amount in the first year and then a lower

amount as yearly renewal fee.

Revolving Line of 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. Most credit cards offer revolving credit.

Personal Identification Number (PIN) - As a security measure, some

cards require a number to be punched into a keypad before a transaction

can be completed. The cardholder can usually change the number.

Teaser Rate - Often called the introductory rate, it is the below-market

interest rate offered to entice customers to switch credit cards.

Joint Credit - Issued to a couple based on both of their assets, incomes

and credit reports. It generally results in a higher credit limit, but makes

both parties responsible for repaying the debt.

TYPES OF CARDS

 MasterCard – MasterCard is a product of MasterCard International

and along with VISA are distributed by financial institutions around

the world. Cardholders borrow money against a line of credit and pay

it back with interest if the balance is carried over from month to

month. 23,000 financial institutions in 220 countries and territories

issue its products. In 1998, it had almost 700 million cards in

circulation, whose users spent $650 billion in more than 16.2 million

locations.

 VISA Card – VISA cards are financial institutions around the world

distribute a product of VISA USA and along with MasterCard. 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. Nearly 600 million cards carry one

of the VISA brands and more than 14 million locations accept VISA

cards.

 Affinity Cards - A card offered by two organizations, one a lending

institution, the other a non-financial group. Schools, non-profit

 groups, pro wrestlers, popular singers and airlines are among those

featured on affinity cards. Usually, use of the 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.

 Gold Card/Executive Card – A credit card that offers a higher line

of credit than a standard card. Income eligibility is also higher. In

addition, issuers provide extra perks or incentives to cardholders.

 Platinum Card – A credit card with a higher limit and additional

perks than a gold card.

 Titanium Card – A card with an even higher limit than a platinum

card.

 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. It is used by people new to credit,

or people trying to rebuild their poor credit ratings.

 Smart Card – Smart cards, sometimes called chip cards, contain a

computer chip embedded in the plastic. Where a typical credit card's

magnetic stripe can hold only a few dozen characters, smart cards are

now available with 16K of memory. When read by a special

terminal, the cards can perform a number of functions or access data

stored in the chip. These cards can be used as cash cards or as credit

cards with a preset credit limit, or used as ID cards with stored-in

passwords.

 Charge Card – fall between a debit and credit card. Works like the

latter and you don't have to be an accountholder. Just pay up in full

when the bill arrives with the mail. No outstanding are allowed, in

other words, no revolving credit facility either. American Express

and Diners are providers.

 Rebate Card – This is a card that allows the customer to accumulate

cash, merchandise or services based on card usage.

 Co-Branded Card – This is a marriage of convenience between two

service providers who want a trade-off with the other's strengths.

Specific facilities are made to members through these tie-ups. So,

 Times Bank and Citibank have a co-branded card that allows

concessional rates for add-on cards or telephone banking. Stan chart

and Hindustan Lever Limited have a co-branded card to sell Aviance

beauty products. SBI-GE Capital has a co-branded card for retail

loans.

 Cash Card – Cash cards, similar to pre-paid phone cards, contain a

set amount of value, which can be read by a special cash card reader.

Participating retailers will use the reader to debit the card in

increments until the value is gone. The cards are like cash -- they

have no built-in security, so if lost or stolen, they can be used by

anyone.

 Travel Card – these works mostly as debit cards for the limited

purpose of travel. Citibank Dollar Card, American Express, Bob card

Global and Hong bank Thomas Cook International Card are among

the players in this section.

 Debit Card – It is the accountholder's mobile ATM. Open an

account with a bank that offers a debit card, and payments for

purchases are deducted from your bank account. The retailer swipes
 the card over an electronic terminal at his outlet, you enter the

personal identification number on a PIN pad and the money is

immediately debited at the bank. Citibank and a few domestic banks

like Times Bank offer this.

 SALIENT FEATURES

Annual Fee:

All credit card issuers charge an annual fee which is payable at the start

of the year. The start of the year, of course, is your membership year, and

not the calendar year. So, if you got yourself a card in March, you can

expect to be billed the annual fee every March until you cancel your card.

As a privilege, this fee is sometimes waived the first time. 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.

Forwarding Balance (or Revolving):

The most attractive feature of a credit card is that you need not pay off

your dues in whole. You can opt to pay 5% of the total amount on or

before the due date, every month, the rest is carried forward. But there's a

price to pay for this extended credit - interest! Normally, interest varies

between 2.5% and 3% per month.

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. This rate is charged to

the cardholder on the amounts carried forward beyond the due date for

the payment of balances. Most card issuers will tell you their monthly rate

of interest. It might sound low at 3%, but when you look at the interest

rate over the year, it turns out to be as high as 43%.

Cash Advance:

An important feature - lets you withdraw cash from designated ATMs

using your credit card. Use discretion when withdrawing cash on your

credit card because the charges for this facility are high, around 2.5% to

3% per transaction!

BENEFITS:

Credit:

When you use a Credit card to pay for anything, you get an interest-free

period of 45 days. Billing cycles are structured in such a way that you

definitely get at least 30 days out of these as clean credit time, which is

especially beneficial to salaried people. Better still, you can opt to pay
your bill in full when you receive it or you can carry forward your

payments by paying as little as 5% of the total amount on or before the

due date, every month. You can spend now, pay later.

 Convenience:

With a credit card on you, you don't need to run the risk of carrying a

lot of cash.

 Cash Advance:

Another advantage of a Credit card is that you can use it as an ATM

card too! But remember, there's a fee to it. It typically starts with a flat

fee going up to a percentage-based fee on the amount of the

withdrawal.
DRAWBACKS:

Greed!

Just because you have credit being extended to you doesn't mean that you

should go on a rampage! Use your card with discretion and caution.

Remember, it is an extremely expensive way to borrow money! View it

as a convenient and safe way to carry cash, a timely help in an emergency

or taking advantage of an opportunity that you would have otherwise lost

out on, like an investment!

Do's & Dont's

 Do not leave your Credit Card lying around the house or on your

desk at work.

 If your card is lost or stolen, or you suspect it is being used

fraudulently, report it immediately to your bank.

 Hold on to receipts from your transactions. In fact, keep your receipts

filed or in one place - you'll find them easily, should the need arise.

And when you want to throw them away, don't just thrash into the

bin, shred or tear them before you do.

 Never give your Credit Card number over the phone, unless you've

made the call, and it is to your bank or someone you trust, and you

really, really need to!

EXECUTIVE SUMMARY OF CREDIT CARD INDUSTRY

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

conc0ern, those in the industry say. There has been a seven-fold increase,

with the number of cardholders touching over 38 lakh. These figures

point towards the fact that the credit card industry in India is growing at a

brisk annual rate of 30 per cent and is expected to grow at a similar rate in

the coming years.

While issuing the cards may seem to be easy, the challenge for the banks

lies in being able to manage their portfolios by keeping the delinquency

levels at the lowest and customer satisfaction levels at the highest.

Customer satisfaction is the key to success. You want customers to be

happy with the products and services you provide. If they feel they have

received good value for their money, your business will prosper. Getting

your customers to tell you what’s good about your business, and where

you need improvement, helps you to be sure that your business measures

up to their expectations.
Apart from attracting potential card users, customer retention is also one

of the most important factors influencing a card issuer’s success. ----.

With the influx of new financial institutions in the card market, people

have started using cards on a more regular basis. The level of services

provided by these organizations is increasing day by day. In order to

ensure that the existing customers stay loyal, Organization has to

ascertain whether its existing customers are satisfied with its current

service offerings.

This research has tried to study the satisfaction levels of a sample of 100

credit card holders. These respondents each hold credit cards, which may

be of different kinds.
 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, those in the industry say. Seven years back, India had a base of

around five lakh credit cards. There has been a seven-fold increase, with

the number of cardholders touching over 38 lakhs. 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. This fortifies the view that conservative purchasing ideas

are giving way to the big in-thing. But it is the usability that raises doubts.

According to a survey by the Credit Card & Management Consultancy

(CCMC), 71 per cent of first-time credit card applicants in the country

have expressed the need for advice on appropriate card selection despite

the plethora of cards available in the market. Through this survey it has

come to realize a long felt need of potential and existing cardholders for

advice on suitable selection of a credit cards. The whole idea behind the

introduction of the credit cards was to increase the purchasing capacity of

the cardholder. With this in mind, the foreign banks launched a credit

card blitzkrieg on the Indian customer.

The innovations have already begun to show their effect. The Standard

Chartered Bank has seen its credit card base shoot up after the launch of

its Global Rupee Card in March last year.

It has seen the fresh issuance of global card increase by more than one

lakh, and the bank now has a base of more than half a billion. But the real

challenge for the banks is to make the holder spend more on the card.

Going by estimates, India has a long way to be anywhere near the

matured markets. The markets like the United States and England have an

average annual card spend of 1,300 and 3,600 dollars respectively.

The credit card players will have to think about simplifying the foreign

exchange transactions. When one uses the card, it is entirely his

responsibility to make sure that exchange controls have been complied

with. The banks that issue the cards have made it abundantly clear that

one has to look out for him. It is upon him to find out the facts of

regulatory life. The real point of worry is the spending on the credit cards.

According to estimates, the average card spending in India is even less

than that in Indonesia. Those in the credit card business say that per

capita credit card spending in India is about five hundred dollars (Rs

21,500), whereas in Indonesia, it is about 678 dollars (Rs 29,154). At

present there are over a dozen players in the credit card market in India,

and the fact is the foreign banks are clearly the leaders. The leaders will

surely be identified by the innovations for the card users.

But the alarm has been raised for the banks by the figures that show that

while the average usage in Malaysia is 27 times annually, in India it is

only 11 times. Some of the key factors impacting the cards business in

India are limited credit, wide geographical spread, limited

telecommunication infrastructure and emerging regulatory controls. The

other players feel that the card acceptance base in India has to be

widened. Suggestions include credit card usage at petrol pumps and

railway bookings.

They also point out that though the cards business has been in the country

for long, but even today the insurance premium cannot be paid by card.

Though LIC is talking about the introduction of this facility to customers,

but it 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, with many loopholes remaining to be plugged.

Of the twenty million taxpayers in India, more than ten per cent of them

are cardholders. Those in the industry point out that this figure is not bad,

considering the fact that; the cards business is still in its initial stages.

However, the players feel that the business has not reached an optimum

level to say that they are making money. Even the largest player in the

Indian market does not still have the economies to make the card business

really profitable in India, despite the fact that it has more than one million

credit card holders. Less than two per cent of private consumption

spending in India is done on cards.

While issuing the cards may seem to be easy, the challenge for the banks

lies in being able to manage their portfolios by keeping the delinquency

levels at the lowest. Huge investments in systems 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 for 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 day 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 balance facility. The balance transfer rate is lower for a

certain period (say six months) and then the normal rates apply. But

again, this is a temporary solution to a chronic problem.

4. What is the reach?

Not an important question - most outlets in India accept both the Master

card and the Visa card, and most credit card companies provide Visa or

Master cards. So, its fairly simple, and doesn’t need much head

scratching - they're all more or less the same. One thing you could do is to

check out for the Automated Teller Machines nearest to your house or

work place (ATMs - almost all credit card companies now provide you

the facility of withdrawing cash from machines - I guess for things that
cards just cant buy. These machines are called ATMs, and are helpfully

scattered all over the city/country/world). Having more ATM outlets in

Thailand wouldn’t be of any relevance to a person who rarely travels

abroad, though it may certainly be a goal to work towards after buying

the card. Please also remember that Amex credit cards are not part of the

Visa/ Master chain, and have a separate chain of outlets where it’s

accepted.

5. Is it a Global card?

Now this could be useful to you if you are an overseas traveler. A Global

card can be used for paying expenses in foreign currency just like you use

a credit card to pay in rupees. Nowadays, a Global card is being issued at

the same cost as for a similar domestic one. It is better to have a global

card, especially if there is no premium attached.

6. How useful are branded or affinity cards?

A partnership between a card issuer and the non-profit, social or lifestyle

association is what results in an affinity card. This is for providing

financial rewards to the group or association. E.g. Citibank Women’s

card, Citibank WWF cards. Citibank WWF Visa card donates a

percentage of the transaction value made through the card to the WWF

fund for its environmental conservation activities. 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 co-branded card. This entitles the cardholder to lots of freebies,

prizes, discounts on co-branded products. Logic: If a customer is loyal to

one brand, he will want to purchase the other. So if you were loyal to a

particular brand, it would make sense going for those co-branded cards.

e.g., Citibank and IOC, Bank of India and Taj group of hotels etc.

7. What’s the lost card liability?

Most Card issuers mention in the brochures that lost card liability is Rs

1000. Be careful, that is actually AFTER it is reported to the Bank. The

liability is actually unlimited before reporting (in cases like this, you

would actually thank the credit limit because though the liability is

unlimited, the ceiling should logically be your credit limit, 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. Are there any freebies?

Citibank gives a Pond’s gift hamper free on subscription to its Citibank

Women card. Personal accident insurance for Air, Road or Otherwise is

packaged along with the subscription. Also, Baggage cover, Purchase

Protection cover and credit shield is bundled free of cost along with the

card. If you feel one these parameters are important, and then settle for

the one that gives a higher cover.

9. Is immediate cash withdrawal possible?

Check out if the Bank has any ATMs near your house or workplace. This

surely helps in times of emergency. The cost component for a cash

withdrawal could be classified as follows: Service fee (transaction fee)

each time you pull out money, and Interest rate for the period for which

you have used the money - until settlement date. If you are going to

withdraw cash frequently, better watch out for this cost.

10. How long is the free credit period?

The days of credit one gets depends on the statement date and the date of

transaction. On an average, you could assume you'd get around 20 days of

free credit. However, if you buy just after the statement date, you could

end up getting unto 50 days of credit. Look for cards that give you the

highest free credit period!

11. Is a Helpline available?

A 24-hour Helpline service from the Card Company helps the cardholders

during the non-banking hours. Reporting of theft, checking of available

credit limit and other enquiries can be made by the cardholder round-the-

clock. In the end, like everything else in life, the card you want is really

up to you - what matters the most to you - credit, reach, the freebees,

international reach or a combination of parameters. Use our card category

on the left bar to simply list out the names of the cards, or choose by bank

name and see the cards they offer. Or look for cards offering the lowest

interest rate. Of the lowest charges on cash withdrawal (believe me, it

gets to be a serious consideration as one goes along). Go to our shortlist

card section, and search for cards based on any criteria that you want.

Happy hunting, and stay careful - you may like to use our section on how
to use the card carefully to minimize the chance of its misuse by someone

else.
 OBJECTIVES OF THE STUDY

Study is the one of the important parts of any study. Following are the
objectives of the study: -

 To find the scope of the credit cards industry in India.

 To know the customer awareness regarding credit cards.

 To analysis the benefits of credit cards.

 To know how it is beneficial to manage the cash risk.

 To understand the market potential of credit card in Delhi.

SCOPE OF THE STUDY

The study on Credit card- increase the volume of profit of this

industry. We have considered geographical Unit of Delhi. It in we
analysis the comparison of different credit cards and their detail reports
their branches and values.
 RESEARCH METHODOLOGY

Confining our study to the geographical limits of Delhi, we chose a

sample of 100 people - 50 cardholders and 50 non-card users, using the

probability sampling technique where every individual fulfilling the above

criteria had an equal chance of being selected for the survey. Following are

some of the facts that were revealed through the survey.

Sources and Method of Data Collection

The data on the present study will be collected by the investigator

himself. It's customary to distinguish data between primary and

secondary.

Collection of Primary Data:

The collection of primary data done with the help of personal meet

with the Managing Director and Supervisory and Official Staff after

Securitization of records maintained.

A personal survey and surprise check are prompt to be carried out

to ascertain the fact on the basis of survey of credit card at personal

interest.
Collection of Secondary Data:

 News papers,

 Press Media

 Magazines

 Telecommunication

Research Tools:

 Research design : Exploratory

 Sampling Unit : Area of Delhi

 Sampling Size : 100 people- 50 Cash holder, 50

non- cash user

 Sampling technique : Probability Sampling

 ANALYSIS

It was found that for the frequent traveler’s 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 evolution of

financial markets. Traditionally Indians like to pay in cash or at the most

avail the services of a bank. As a result, credit card companies had to

educate the consumers and spread awareness of the uses of its products.

The companies have tried to address this issue through promotional

campaigns:

 Placing of take away firms of credit card at more than a thousand

merchant establishments.

 Appointing of DSAs

 Using business magazines and newspapers for advertisement.

 Mailing of forms along with contests to professionals and middle

management executives etc.

 Tapping the get member route

 Reducing their minimum eligibility criteria and changing income

documentation structure.

 Introduction of photo cards.

 Tying up with durable consumer goods manufacturer (e.g., Onida,

Philips) to sell their products.

 Providing ATM facility to their card holders

 Travel assistance via tele-banking.

 COMPARISON OF CREDIT CARDS

Card Card
Brand Acceptance
Issuers Type
Citibank
Gold/Preferred Master International
NA
Citibank
Gold/Preferred Visa International
NA
Citibank
Indian Oil Master Domestic
NA
Citibank
Silver/Classic Master International
NA
Citibank
Silver/Classic Visa International
NA
Citibank
Women Visa Domestic
NA
Citibank
WWF Visa Domestic
NA

ICICI Solid Gold Visa International

ICICI Sterling Silver Visa Domestic

ICICI True Blue Visa Domestic

SBI Classic/Master Visa Domestic Standard

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. While some of them are offering attractive interest rates, others

are luring customers by their reward schemes. With a plethora of choices

on offer it is not easy to come to a decision on any particular card.

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. The cost of cash advances is particularly onerous.

When traveling abroad, carry a mix of plastic, cash, debit cards and

traveler's checks.

Want a better rate?

Just ask for Acquiring new credit card customers is expensive and time-

consuming, so issuers don't want to lose creditworthy individuals. If

you've had a year of on-time payments, call your credit card issuer and

ask for a cut on your interest rate.

Cut credit card costs

Make payments on time, avoid cash advances and don't exceed your

credit limit. Cash advances are more costly as there's no grace period, so

you pay interest from the day you take the money.
Identity theft

The No. 1 identity theft is credit card fraud. New card accounts are

opened or existing accounts are taken over. The Federal Trade

Commission offers a hotline and Web site for advice and tips.

Save stress with less debt

The stress of credit card debt has been directly linked to physical

problems like heart attacks, insomnia, explosive emotions, smoking,

overeating and lack of concentration.

Shop online without the worry

Credit card companies are switching to zero liability. If your credit card is

misused on the Internet, you won't be liable for online transactions

charged by an unauthorized user. But zero liability doesn't mean zero

responsibility -- you'll have to meet certain requirements.

Fraud alert

Placing a fraud alert on your credit files prevents an imposter opening

credit in your name. The downside is that you give up the convenience of

"instant credit." You can't sign up for a new credit card and go shopping

with it three minutes later.

Teen consumers

Credit card companies are targeting the increasingly powerful teen

consumer. Teens get the credit card and the bill, but parents are legally

responsible. Nonprofit organizations caution that teens lack personal

finance teaching, and aren't ready for plastic.

Be careful when you do the card hop

Changing credit cards for a better deal may net attractive teaser rates, but

many cards now deter balance transfers with tough terms and high costs.

Read the fine print carefully.

Silencing phone solicitors:

You can pull the plug on telemarketers calling your home. The

Telephone Consumer Protection Act requires telemarketers to record your

'do-not-call' request and refrain from dialing you for 10 years.

Credit score

During and after a divorce, you need to make a clean financial break to

keep your credit report accurate. A first step is to cancel credit card

accounts, even if you were only an authorized user, and reapply for new

accounts.

Digital wallets

Digital wallets, or e-wallets, are extensions of a consumer's credit cards.

Basic e-wallets store cardholder information, filling in account and

personal information at cyber stores. They are convenient, secure solution

to shopping online.
Don't fill up on gasoline credit cards

Gas company cards offering rebates on purchases can be worthwhile

when gas prices are high. But the annual percentage rate and the annual

fee charged are higher than normal cards. People who carry a revolving

balance will find these cards much less rewarding.

Credit union cards

Credit unions usually have lower interest rates and fees than banks,

though they tend to have fewer choices than bankcards.

Student credit card choices

Students and their families looking for the best student credit card need

to focus primarily on annual fees and interest rates. Generally, students

with a work and credit history will find a regular credit card is the best

deal.

Variable-rate cards

The cost of using credit cards has increased. Variable-rate cards, the most

common type in the nation, tend to rise in step with the prime rate. The
prime rate has gone in the Fed's efforts to cool the red-hot economy, but

spending hasn't been significantly reduced.

Financing vacations

Most people finance vacations with their credit cards. Even 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.

Emerging credit

Tweeners – people with emerging credit or recovering credit -- can find

good credit card deals. To get the best deal they need to compare annual

percentage rates, grace periods, credit limits, and fees, and avoid credit

cards with hefty application and processing fees.

Affinity credit cards

Affinity credit cards (aka "charity" cards) may give you a sense of

purpose to your spending, but can cost more than your actual donation.

Affinity cards carry high interest rates and annual fees. They have more

value if you don't carry a card balance.

Paying for vacations

You can enjoy that vacation even after it's over by limiting your credit

card use. Consider planning ahead, setting a budget and saving for your

vacation. If you're still short-funded, a home-equity loan offers a better

interest rate than a credit card.

Student loan debt

Graduating college students face an average loan debt of more than

$35,000, and it needs to be attacked aggressively. First, concentrate on

paying down credit card debt, and then tackle your student loan debt.
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. We hope

that you find the following tips beneficial.

Interest Rate Awareness:

We cannot stress enough the importance of being aware of interest rates

when using your card(s). Please utilize the lists above!!! High rate cards

can be put a BIG dent in your pocketbook. To illustrate our point again, a

cardholder with an average balance of $2,500 and a 19.99% purchase rate

will pay $1000.00 in interest alone in just two years! The same cardholder

would pay only $400.00 in interest if the rate were lowered to 8.00%, a

difference of $600.00! Also, be aware of cash advance rates. Cash

advance rates are typically much higher than purchase rates and usually

there is no grace period for cash advances (not to mention cash advance

fees). Therefore, avoid cash advances if at all possible.

Taking Advantage of Promo Rates

While introductory or "teaser rates" are generally short lived and are

intended strictly to entice consumers, savvy consumers can benefit a great

deal from promotional rates. Look for cards that offer longer term

introductory rates and longer term promotional rates on balance transfers

(6-12 months). Some cards even offer very attractive long term

promotional rates on balance transfers...rates that are good until the dollar

amount transferred is entirely paid off! Consumers that have more than

one card with available credit can transfer balances between cards in order

to take advantage of promo. Transfer rates (a ploy known as "card

dumping"). Finally, when the promo. rate period ends (for transfers), it is

a good idea to call the card company and request an extension of the rate.

Consumers with a good payment history often get extensions. You must

be aggressive when dealing with credit card companies! You can also

negotiate to have your regular interest rate lowered. Threatening to pay off

a given card often puts consumers in a bargaining position when dealing

with credit card cos.

Avoiding the Minimum Payment Pitfall:

One of the greatest card pitfalls is making only the minimum payment

each month. Make every effort to pay over the minimum each month,

even if it is only a few dollars over. The long-term impact of making "just

the minimum payment" is devastating. According to Consumer Credit

Counseling Services, paying the $60 minimum payment on a $3,000

credit card balance would take eight years to pay off and would translate

into $2,780 in interest! By paying only $50 more a month, however, the

debt would be paid off in three years and result in a savings of $1,800 in

interest charges!

Graceless Grace Period:

Avoid cards that begin computing their grace period at the time of

purchases, rather than billing. Only a few cards still use this method of

interest computing, but there are still some out there. Keep your eyes

peeled!
 CONCLUSION

Whenever Internet transactions are discussed, immediately the thought of

credit card comes to everybody’s mind. This is because in US the

payments by credit a card is quite common. Even before online purchases

have become popular, normally purchases are made through credit cards

only. 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.

Even in US, much discussion is going on as to how to avoid frauds,

misappropriation, etc of credit cards once the card number is given online

to a merchant. Encryption technologies. Secure socket layers, etc are

being introduced to avoid such things In spite of all these measures, still

reports keep coming regarding credit card frauds here and there. In other

words, there is no 100% foolproof to make credit card payment a safe

mode of payment.

In other countries, where credit cards payment system is not as popular

as US, online shopping through credit cards resulted in great failures. At

least in Singapore, a mega shop had experienced a fraud of huge

magnitude and decided to suspend immediately their online business.

Similar stories are not uncommon in other countries too.

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;

1.Use of credit cards is popular to only a few thousands of executives,

businessmen, etc from big cities.

2.That any person using credit card is liable to declare IT made many

people surrendering their cards. In other words if credit card is made the

payment mechanism, only IT payers will be eligible to buy goods online.

3.Still many leading credit card companies are yet to install their

infrastructure to process the online payments.

4.Then there is the question of sales tax laws Each State has its own rate

of tax structure for each and every commodity. How to charge tax when a

transaction takes place online and at what rate will pose problems of

billing.
5.Many establishments do not like to offer credit card facility

due to the service charges to be paid to cr card companies. They get the

payment only after a certain period of time once the goods are sold. Both

of them make the profit margin less.

As mentioned earlier, the fraud element is applicable to India also. In

view of all these factors, in India; Use of credit cards cannot be expected

to boost the sales of online sales, particularly business to customer

Then what is the way out?

There are other methods of payments for Indian online business, which

are given below:

 Payments by electronic cash/ cheque may be made legally valid

including electronic signature .I believe once the cyber laws are passed

by GOI, this is possible.

 Each merchant/shopper can allot a secret code number to the existing

clients (customers). On receipt of this code number, the goods can be

dispatched by VPP and other modes of dispatch, which will ensure

 collection of payment against delivery. However, this facility can be

extended only to existing customers.

 Banks should be asked to immediately create necessary facilities for

any of the a/c holders to operate the a/c through online. Once a

purchase is made, the a/c holder can transfer the required amount to

the merchant A/C online. The MERCHANT BANK CAN INTIMATE

the shopper about the transaction. All these activities can be carried

out instantly though proper programming. Activity can be made part of

the ordering activity.

 Large organizations can issue authorization letters to each 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. This would require installation of transaction servers in the

companies or can be integrated with their online business activity.

Similarly all government establishments can device a mechanism to

enable their employees make online purchases. These are all some of the

ideas to making the online purchases easier and smoother without

affecting the payment due to the shoppers.

They may look difficult to achieve but with proper programming

techniques and the use of appropriate servers, they can be easily achieved.

In conclusion, payment through credit cards will not result in increasing

the online shopping as generally believed. We need to device different

mechanisms taking into account Indian laws, shopper’s requirements,

banking practices prevalent in our country.

 RECOMMENDATIONS

HOW TO PROTECT -

The following are my recommendations. There may be other options

available as well.

1. Never give your credit card to the company. Make payment by cheque

instead.

2. Monitor your credit card statements.

3. If there is an unauthorized charge, report it to Micro Forecasts

immediately and demand a charge reversal. Wait several days and then

check with your credit card company to see if you received the credit. Do

not wait for your next statement to see if the credit appears.

4. If the refund is not there, call Micro Forecasts again. Most importantly,

deny the charge immediately with your credit card company.

For this to be effective, it must be done in writing, and must be done

within 60 days from the date you received the statement on which the

disputed charge appeared. This 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.

5. Report your credit card as lost/stolen so that no further charges can

occur. You will get a new card within a couple of week. Many people

have done this, including myself.

6. Report the problem to authorities as per the next section is?

Very likely

Somewhat likely

Not sure

Somewhat unlikely

Very unlikely

To what extent does credit card service exceed your expectations?

Very great extent

Great extent

Some extent
Little extent

Very little extent

Which of the following statements, according to you most representative

of your credit card service provider?

They are Helpful and Friendly.

They are polite, cheerful and are knowledgeable operators

In tune with the needs of its clients

Prompt in dealing with customer complaints

Unwilling to go the extra mile for its customers

Poor customer phone support

You are often put on hold for a long time

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

Longer credit period

Higher credit limit

Lesser charges

Better offers

Please rank the services of the following card issuers in order of your

preference.

Citibank

HSBC

Bank of Baroda

Bank Of India

Standard Chartered

ANZ Grindlays

Times card

ICICI

SBI

Personal details:
Age:

Profession

Income: 15,000-25,000 25,000-40,000

40,000-60,000 Above 60,000

Thank you for taking the time to complete this survey

 BIBLIOGRAPHY

 Marketing management: Philip Kotler

 Financial Management: Khan & jain

 Business Statistics: K.K.Khanna & Jagjit Singh

 Annual report SBI

 Annual report ICICI

 Annual report Citibank

 Annual report FICCI

 PhD. House library

 JAMIA MILLIA ISLIMIA library

 Google search

 Yahoo search

 AltaVista search

 MSN search
 India infoline.com

 MAMA search

 Citibank.com

 Sbi.com

 Icici.com

 Indiatimes.com

 A&m.com

 Business today

 Business week

 Times of India

 Business world

 Business India

 Outlook

 India today
 A&m magazine

 Strategic marketing magazine

 Economic times

 Financial times

 Times of India

 Hindustan times

 Indian express

 The Hindu

 Home trade search

 Strategic management: P.K.Ghosh

 Brand management: Y.R.Morthi

SUGGESTIONS OF THE STUDY

The banks battle today is more with cash than with other banks.

Considering the huge potential of the Indian market, it is in the interest of

the issuers to educate the consumers about the benefits of holding credit

card. The campaigns must also be convincing enough to clear the myth

that credit cards increase spending. Focus should be on changing non-

card related spending to card related spending. The issuers must focus on

service and pricing and must recognize the importance of the billing and

payment process to retain credit card holders.

The credit cards schemes would be successful only if they meet the

customer’s requirement of wider acceptability rather than fringe benefits

like non-crisis credit or prestige proposition. 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, backed

by much more comprehensive merchant establishment network. The

banks must also increase the number of cardholders by reducing the

initial-one time subscription fee.

The banks should step up advertising that will help to build a brand image

and create a higher brand recall like that of Citibank. With more and more

people willing to adopt to credit cards, banks should undertake innovative

strategies to increase card spends. Simultaneously, to cater to high net

worth customers and those with niche needs, banks should provide more

of premium plastic and CO-cards that piggyback on the existing

infrastructure, but provide holders with exclusive add-ons.

Future promotions could include: Telemarketing, direct sales, direct mail,

promotional advertising through media, common ATM services between

banks (to reduce cost of operations), schemes 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.

LIMITATIONS OF THE STUDY

 The study is confined to NCR 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.

However, to counter this the data has been verified from a number of

different sources to give it a measure of authenticity.

 Study was constrained by limited availability of data. Not all banks

could reveal their confidential marketing strategies and statistical

information.
INTRODUCTION
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
ANALYSIS
COMPARISON OF
CREDIT CARDS
LIMITATIONS OF
THE STUDY
SUGGESTIONS OF
THE STUDY
CONCLUSION
RECOMMENDATION
BIBLIOGRAPHY
QUESTIONNAIRE