Credit Card use rising steeply in India

  • Credit cards increasingly being used for grocery shopping, paying phone and electricity bills and other expenses.  
  • According to Viney Singh, MD of Max Hypermarkets, when they launched their hypermarket, the credit card usage accounted for 40% of our sale value. In the succeeding five months, this had touched 50% and they see usage growing every month
  • To consumers, cards are a combination of convenience ( not having to visit ATM's to withdraw money) and rewards (from various loyalty programs). 
  • With credit card becoming easily accessible, aggressively marketed financial product, the consumer base and consequently, the usage has increased tremendously.
  • Over the last three years, the credit card industry in India has grown at a compounded average growth rate of over 30%.
  • The usage of credit cards at retail outlets has nearly doubled — from 30%-35% two years ago to 50%-60% - Nirupam Sahay, VP (marketing), SBI Card. 
  • The transaction value of credit cards also has dropped and the usage has become more casual.
  • Credit cards are typically used for purchases above Rs 1,000. But nowadays people have started using them for even around Rs 500 - Krishnan Govindan, head (marketing), credit cards, ICICI Bank. 
  • Petro cards are among the most popular.
  • The departmental store category along with fuel and restaurant spending account for the most frequent swipes.
  • In terms of value, jewellery, electronic goods and telecom account for a major chunk

- Contributed by Vaibhav Agarwal