A Synopsis Study Of Credit Card In Indian Scenario

Introduction

Taking a cue from global economies, India too has been rapidly venturing into the plastic money business. In today’s economy, credit cards are being widely used. During the past decades, these cards have become more and more popular in India. The holders are relieved from the risk of carrying cash or a checkbook with them, owing to the revolving nature of credit, the customers can take advantage of it, and when he pleases, within the overall limit.

The purchasing power of the cardholder increases to the extent of the credit limit given in the card, if wisely used, credit cards can provide them extra money, interest-free. The choices available in the market are money and most cards offer different features filling petrol on priority, easy overseas travel, and a special privilege for women six four-centimeter plastic card makes possible all this, and more plastic culture has caught on in India, the initial years have been shed and cards have become virtual currency. Now the credit card industry’s growth rate is C5-I-percent per annum. The credit card business has been, growing at a rapid pace. The world the present total volume is at over one billion cards and a turnover of around US$ 1,500 billion. India is witnessing a quantum jump with the growth rate at around 21 percent p.a. The present (2013) number of cards issued by banks in India would be a little over eighty-one lakhs. Citibank is among the foreign banks and the largest credit card issuer in India.

Importance And Significance

Personal Credit Benefits:

For individuals, credit cards are an important part of everyday life. Whether purchasing gas and groceries or reserving a hotel and rental car for an upcoming vacation, credit cards represent a convenient and secure form of payment for consumers. Benefits ranging from damage protection on purchases to the ease of disputing suspicious charges or fraudulent activity make credit cards an attractive form of payment. Beyond the ease of use and added security, credit cards can also help you build a solid credit history. With regular use and prompt payment, responsible consumers will find that lenders are more willing to offer them additional credit in the form of increased credit lines, mortgages, and consumer loans.

Business Credit Benefits:

New businesses and entrepreneurs looking to embark on a new business venture often find capital hard to come by. For small businesses, credit cards represent an important financial lifeline when traditional funding sources, such as small-business loans, aren’t available. Credit cards help businesses financially, and they also have a positive impact on small-business growth.

Effects On the Economy:

Credit cards are not only important for individuals and businesses; they’re an important aspect of continued economic growth. Cash works best in face-to-face transactions and checks take time to cash. Credit cards and electronic payments, however, make functioning in a global marketplace much easier. This ease encourages long-distance transactions that increase gross domestic product and consumption, both of which lead to job creation. Credit cards play an important role in the cycle of increased consumption and production by offering merchants a guaranteed method of payment and providing consumers with a way to bridge the gap between paychecks in times of emergency.

Significance

Benefits To Cardholder:

The main benefit to the cardholder is convenience. Compared to debit cards and checks, a credit card allows small short-term loans to be quickly made to a cardholder who need not calculate a balance remaining before every transaction, provided the total charges do not exceed the maximum credit line for the card. The financial benefit is that no interest is charged in the case when the full balance is paid within the grace period.

Different countries offer different levels of protection. In the UK, for example, the bank is jointly liable with the merchant for purchases of defective products over some amount of numbers. Many credit cards offer rewards and benefits packages, such as enhanced product warranties at no cost, travel rewards, free loss/damage coverage on new purchases, and various insurance protections, for example, rental car insurance, common carrier accident protection, and travel medical insurance.