Professional Documents
Culture Documents
Comparative Study of Credit Cards in Indian Market
Comparative Study of Credit Cards in Indian Market
Comparative Study of Credit Cards in Indian Market
[Type text]
Website: www.galgotiacollege.edu
[Type text]
CERTIFICATE
Date:
TO WHOM SO EVER IT MAY CONCERN
This is to certify that Ms ANKUR AGRAWAL is a bonafide student of MBA 2 nd Year of this
Institute for the session 2010-12 and He has prepared Research Report titled COMPARATIVE
STUDY OF CREDIT CARDS IN INDIAN MARKET for partial fulfillment of Master of
Business Administration (MBA) affiliated to Mahamaya Technical University, Noida. He has
worked under my supervision and performance during the project has been satisfactory.
I wish him all the best for her future endeavors
STUDENT DECLARATION
I hereby declare that the research report entitled COMPARATIVE STUDY OF
CREDIT CARDS IN INDIAN MARKET submitted by me in partial fulfillment of
the requirements for the MBA (FM/IT), is my original work and that it has not
previously formed the basis for the award of Degree.
Date:
ANKUR AGRAWAL
Candidates signature
[Type text]
PREFACE
There has been an unusual growth in marketing research and a great increase in the
sophistication of the techniques and used during the last two decades.
The
[Type text]
ACKNOWLEDGEMENT
Completing a task is never a one man effort. It is often the result of valuable
contributors of individuals in a direct or indirect manner ,which in shaping and
achieving an objective . Here we cannot resist the temptation of expressing our
thanks to those who have contributed greatly in accomplishing this task.
I would like to pay my gratitude to Mr. Shamaile Nabi for his kind attention
support and giving an opportunity to research work on Comparative study of credit
cards in Indian Market. I, also greatly appreciate the diligent support provided by
all
the
faculty
of
GALGOTIA COLLEGE
OF
ENGINEERING AND
ANKUR AGRAWAL
M.B.A- IV Sem.
[Type text]
CONTENTS
[Type text]
CONTENTS
1.
Introduction
2.
3.
4.
5.
6.
7.
8.
9.
[Type text]
INTRODUCTION
[Type text]
INTRODUCTION
The concept of Buy Now, Pay Later dates back to the late 1960s & 70s with the
introduction of plastic money in the western nations. It originated because the people
wanted a convenient and rapid means of accessing their bank accounts. Also, the
exorbitant price of money changing hands between the consumer, merchants and the
banks led to the diffusion of this concept in the banking system.
For spendthrifts and habitual borrowers plastic money induces spontaneous and onthe-spur spending. But its advantages in terms of convenience, flexibility and safety
far outweigh its pitfalls. Provisions for easy repayment give the card the liquidity of
cash along with the accountability of credit card.
In the past 20 years these cards have proliferated the world market so successfully that
they have altered the face of retail banking. With the power of plastic ruling the
world, India cannot remain behind. With a slow and steady move towards scrip less
trading the country is moving towards cashless transactions.
The plastic money market is bubbling with activity with both Indian and foreign
banks vying to expand their market presence. While the foreign banks have been
hogging the limelight Indian banks are the slumbering giants. The latter have the
advantage of a large customer base, branch network along with low service charges.
These advantages need to be tapped to realize the full potential of these banks.
This project is an attempt to understand the acceptance of credit cards by the
consumers and how it has helped to increase the purchasing power of the consumers.
[Type text]
ORIGIN
[Type text]
The credit card has its beginning in an embarrassing incident that took place in the
early 1950s 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 todays multibillion dollar plastic money
business.
Diners club adopted a promising approach by recruiting various Hotels and
restaurants to act as member establishment for accepting the cards. Not only did these
establishments pay a commission on members 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
card holders 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.
[Type text]
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.
[Type text]
HISTORY
[Type text]
[Type text]
sBy at least the beginnings of the 1970s the personal credit card had become a fixture
in the nations economy. Today more than 60 million credit card accounts exist in the
United States, and seven out of ten households possess at least one credit card. By
19186 out standings balance on credit card account total more than $80 billion
[Type text]
FUNCTIONS
[Type text]
For starter, a credit card is as good as bank behind it. A form of 'near money' these
cards are issued by commercial bank to people whose creditworthiness has been
ascertained. Instead of carrying unmanageable weds of cash, the card holder enjoy the
flexibility and safety of purchasing anything from groceries, cosmetics, petrol to high
value items like refrigerators, television, and washing machines by using his credit
card. Banks ask for TDS certificate or income tax returns document before enrolling a
member.
Credit Card provides the card holder with authorized line of credit of some specified
amount. Such cards may be used for following purposes:1.1.1
1.1.2
1.1.3
Cash withdrawals.
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
[Type text]
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!
[Type text]
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.
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.
[Type text]
[Type text]
[Type text]
Before we 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 fees.
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 requires
a number to be punched into a keypad before a transaction can be completed. The
number can usually be changed by the cardholder.
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.
[Type text]
TYPES OF CARD
[Type text]
TYPES OF CARDS
[Type text]
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 Falls 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.
[Type text]
Travel Card These work mostly as debit cards for the limited purpose of travel.
Citibank Dollar Card, American Express, Bobcard Global and Hongbank 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.
[Type text]
[Type text]
sanctioned, he ends up paying only Rs 1500 per annum even if he doesn't use the
facility. Anyways, the credit card user will be paying this much amount as annual fee.
It is time for customers to realize the amount of extra money they may end up shelling
out to credit card companies in the form of finance charges and late fees when cheaper
sources of credit are available to them.
[Type text]
Issuer of credit card evaluates the form and issues the credit card and fixes the
money limit for use of such credit card.
Cardholder puts the signature on the prescribed place on the card before putting it
to use and starts using it.
Card issuer receives the bill and charge slip and makes payment to the member
establishment.
Card issuer prepares an account statement and sends it to card holder for payment
to bank directly or through its authorized collection centers.
[Type text]
TO THE BANKS:
Banks excited at the projected 40% growth rate 1 in the plastic money industry are
apprehensive about the potential corresponding increase in fraud cases. Some banks
register up to 7% fraudulent case in a year.
1. Default in payments - Currently banks have huge amounts of funds blocked with
willful defaulters. Lack of reliable data / infrastructure to check the credit worthiness
of individuals has led to the situation where people without sufficient resources have
become eligible for availing credit facilities. The marketers in India find it more cost
effective to just right-off the unpaid amount in their balance sheets, after trying to
recover it for six months, than to pursue it throughout the litigation labyrinths.
2. Multiple Imprints or Record of Charge (ROC) Pumping - It refers to the
expedient system by which merchants make multiple charge slips instead of the
relevant number when a cardholder gives in his plastic card.
3. Lost/Stolen Cards - These account for 60% of fraud in India. In case of loss all
multinational banks and some Indian banks limit the liability of the cardholder up to
Rs. 0 (for Gold card) and Rs. 1000 (for Classic card) if card is used after lost / stolen
card has been reported. These banks transfer their risks to insurance companies and
generally replace the lost card within three days. Some banks carry the risk
themselves and investigate the loss before determining the liability of cardholders.
These banks take about a month to replace the missing card.
To combat this, banks have started the Photocard Option which provides the
photograph of the cardholder on the card. They are also providing information about
the lost/stolen cards through the Hot Card Bulletin which is continuously upgraded
and sent to merchant establishments to provide them with the current status. But the
success of this measure is debatable.
A majority of the credit card losses are skewed towards the issuer as the risk on the
cards is carried by the issuer. Visa and MasterCard have a formal set of guidelines
1
[Type text]
known as charge back rules. Once a card holder has informed the bank of the loss of
the card, he is subject only to a minimum liability, which most banks fix at Rs.1000
regardless of how much the card is used fraudulently. Before the hot card date, the
fraud loss is the issuers responsibility. However, if a merchant accepts a hot listed
card, the issuer is entitled to charge back the transaction to the merchants, through
the acquirer. If a merchant is found guilty of willful fraud, his bank is liable.
Visa offers its members a national merchant alert service which acquiring banks can
refer to in order to check on the credentials of the merchants whose business they
woo. It also has its risk identification service which monitors every single transaction
through Visa Net. This enormous database helps zero in on cardholders and locations
prone to fraudulent activity.
Master Cards security and risk management team organizes regular training
programs for banks and member establishments on fraud prevention.
Delivering new cards to members by courier has drastically cut fraud arising from
non-receipt of cards.
TO CARD HOLDERS:
The main problem with credit card is that it is easy to get in over the head. A majority
of card users utilize their maximum limit. Credit cards charge higher interest than
some of the other forms of borrowing. While a credit card offers convenience, that
convenience can be expensive if the card holder is slow in paying off his outstanding
dues. In terms of the annual percentage rate that an individual is charged towards
paying off his debt, the figure ranges from anywhere between 22% to 34% p.a.
depending upon the roll over period (30 / 45 days). Tocombatthese problems potential
card owners decide upon the mode of payment before selecting a card. In India, for
the majority of people who believe in paying off their balances in full, the
prerequisites would include a card with a low or no annual fee and long grace period.
[Type text]
[Type text]
OVERVIEW
[Type text]
CLASSIFICATION OF CARDS
ANZ GRINDLAYS
SILVER - MASTERCARD
GOLD- MASTERCARD
VISA INTERNATIONAL
AMERICAN EXPRESS
CHARGE
CARD
CORPORATE CARD
CITI BANK
CHARGE
CARD
US $ VISA CARD
STANDARD CHARTERED BANK CLASSIC - VISA / MASTER CARD
EXECUTIVE - VISA / MASTER
CARD
GOLD - VISA / MASTER CARD
HONGKONG
&
BANK
GOLD VISA / MASTER CARD
US $ MASTER CARD
BANK OF BARODA
BOB CARD
CHARGE
CARD
BOB SILVER
BOB EXCLUSIVE
BHARAT BOB CARD PREMIUM
BOB CARD GLOBAL
CENTRAL BANK OF INDIA
BANK OF INDIA
CHARGE
CARD
[Type text]
CANARA BANK
CHARGE
CANCARD PROPRIETOR
CARD
CHARGE
CARD
VIJAYA BANK
VIJAYA GOLD
CHARGE
VIJAYA CLASSIC
CARD
CHARGE
CARD
ANDHRA BANK
ANDHRA GOLD
CHARGE
ANDHRA CLASSIC
CARD
CHARGE
CARD
[Type text]
MARKET SHARE
WORLD MARKET
300 MILLION
442 MILLION
MASTER CARD
VISA
INDIAN MARKET
9,15,000
6,00,000
AMOUNT
TODAY
CITI BANK
STANCHART BANK
ANZ GRINDLAYS
AMERICAN EXPRESS
HONGKONG BANK
10,00,000
2,50,000
62,000
80,000
40,000
>1,00,000
INDIAN BANKS
NO. OF CARDS
TODAY
CANARA BANK
BANK OF BARODA
ANDHRA BANK
CENTRAL BANK
250,000
200,000
160,000
100,000
BANK OF INDIA
75,000
BANKS
80,000
105,000
40,000
[Type text]
DIFFERENT
BANKS
CARD
[Type text]
members of professional associations and other affinity groups, including Salomon
Smith Barney clients.
The Citibank Advantage card, now in 16 countries, is the most successful co-branded
card in the industry.
Citibank has 17 million cards, including affiliates, in force in Latin America, Asia,
Central and Eastern Europe, and the Middle East. In most of these markets we have
double-digit share: 43 percent in Puerto Rico, 11 percent in Argentina and Chile, and
more than 20 percent in Hong Kong and Taiwan. In Poland, where Citibank launched
a card in late 1997, we have 20,000 card holders today.
In the United States, Citibank is strongly committed to maintaining Cards as one of
the great success stories of the bank. Acquisition of the AT&T Universal Card
increased our market share of total U.S. card receivables from 11 percent to 15
percent.
[Type text]
[Type text]
Delayed Baggage
If your baggage is not delivered within 12 hours of arrival of a flight, you will be
reimbursed for purchase of essential clothing of up to Rs.5,000/- in India and Rs.
10,000/- when abroad.
Delayed Flight
If you miss an onward flight due to late arrival of an incoming flight, and if there is no
alternative flight within 6 hours (of actual arrival time) or the airline do not provide
accommodation, you will be entitled to Rs.15,000 reimbursement for hotel
accommodation.
Loss of Passport/Ticket
If you lose your passport in a foreign country, you can claim up to Rs.25,000/towards the cost of obtaining a fresh Passport. If you lose your air tickets you will be
reimbursed for it up to Rs.5,000/Purchase Protection
Under International Purchase Protection, purchases on your card are insured against
loss or damage due to fire or theft, for a period of 180 days, from the time of purchase
up to a value of Rs. 50,000/-
[Type text]
Club Rewards - with Fast Track option
With Diners Club Card, you also get the most powerful rewards program in the
country. For every Rs.100 spent on the Diners Club Card, you earn one Club Rewards
Point. You can redeem the Rewards Points you have earned for fabulous travel
packages and delightful gifts. Moreover, these Points are 'evergreen', which means
you can encash them whenever you want.
Besides Diners Club has tied up with Flying Returns, India's No.1 frequent flyer
program from Indian Airlines and Air India. Which means you can now redeem your
Points for free miles!
Finally, your Club Rewards Points can also be converted to Oberoi Top Points and
Welcome Award Stars - the rewards programs of the Oberoi Group and Welcome
group respectively.
Club Perks
Club Perks is a unique promotional offer exclusively for Diners Club Members. Club
Perks gives you special discounts at your favorite restaurants, hotels, car rentals and
retails across the country. It also gives you complimentary into some of the most
prestigious discotheques in the country. All you have to do is charge your bill to your
Diners Club Card every time you visit any of these places.
Club Lounges
Relax between flights.
You can now relax in plush airport lounges, designed exclusively for Diners Club
Members. There are more than 74 such lounges located at various international
airports. In India, you have complimentary access to airport lounges located at the
domestic departure areas in Mumbai, New Delhi, Chennai and Bangalore.
Club Cash
The Diners Club Card gives you the convenience of drawing cash in an emergency, 24
hours a day, 7 days a week! You can access up to Rs.20,000 through Club Cash
through our extensive network of Automated Teller Machines.
[Type text]
[Type text]
Free Delayed Flight Insurance
If you miss an onward flight due to late arrival of an incoming flight, and if there is no
alternative flight within 6 hours (of actual arrival time) or the Airlines does not
provide accommodation, you will be entitled to Rs.15,000/- as reimbursement for
hotel accommodation.
[Type text]
Free Global One Calling Card
The next time you make an international call from overseas, you do not need to use
precious foreign exchange or hunt for loose change. The Global One Calling Card
makes international calling absolutely easy. The Global one Calling Card charges
will be conveniently billed later to your Citibank International Gold Card and
itemized call details will appear on your monthly statement.
[Type text]
Worldwide Assistance
The Visa/MasterCard Global Assistance Services can be used for reporting lost or
stolen Cards, requesting for an emergency Card replacement or for emergency Cash
Advances. A wide range of miscellaneous information is also available for your
benefit.
Additional Card
You can share the power of your Citibank International Gold Card with your family.
Your Citibank International Gold Card Membership entitles you to Additional Cards
for two members of your family, over 18 years of age, at a special price of Rs.1000/p.a. per Card.
[Type text]
[Type text]
INSURANCE BENEFITS ON AN ICICI BANK CREDIT CARD
Life is unpredictable and we at ICICI Bank understand your concern for your family.
Insurance is by far the best way to safeguard the interests of your family. And
therefore in addition to any insurance cover you already have, ICICI Bank offers you
the most comprehensive insurance related benefits.
Of course, we offer you accident insurance, but in addition we offer you medical
insurance, credit shield, purchase protection, baggage insurance and household
insurance.
EARN WHILE YOU SPEND- ICICI Plus - REWARDS PROGRAM
A special bonus plan that allows you to earn points every time you use your Card.
Every Rs. 100 that you spend earns you a reward point. In effect a spend of Rs 2500
on your card will amount to 25 reward points which is equivalent to a value of Rs. 25
given back to you.
First time usage Bonus
As a very special offer, for the first time that you use your ICICI Bank Credit Card,
we will credit your rewards account with 25 bonus points.
Accelerator points
When you spends in any billing cycle exceed Rs.5000, you earn an additional 10%
points over and above the normal reward points.
Redemption
To begin redeeming your reward points, you need to have a minimum of 150 points.
The redemption of reward points will be done annually, first against your renewal
fees. Thus, for example, an annual spend of Rs. 30,000 on a True Blue Card ensures
that the renewal fee for the next year is less by Rs 300. Unused points will be credited
to your card account in blocks of 25 points. Reward points are awarded for all types
of transactions, except fee, (joining, annual, renewal) balance transfers and service
charge transactions.
[Type text]
SELF SET LIMIT
The ICICI Bank Card ensures that you are in charge at all times. This is the only card
that allows you to pre-define your own credit limits
You can actually request for a limit lower than what you are eligible for and your
Card gives you the choice of deciding the limit that you wish to enjoy.
Simply call our Call Center Executive and make your request. Your credit limit can be
changed on-line and will come in to force from the next billing cycle.
This incredibly powerful feature has been developed keeping your needs in mind, and
it helps you manage your finances prudently, without compromising on your needs.
WIDE ACCEPTANCE
Your ICICI Bank Credit Card is affiliated to VISA and is welcomed at all Visa
Merchant Establishments (Look for the VISA logo 1,10,000 establishments across
India and Nepal). The Sterling Silver and Solid Gold Card are accepted globally by
over 18 million VISA card - accepting establishments worldwide.
You now have the flexibility of using your Card to pay for everyday purchases on one
hand and large value purchases on the other.
24- HOUR CUSTOMER CARE
We understand your needs and appreciate that you may need assistance around the
clock. For your convenience, we have set-up the ICICI 24-hour Customer Call Center
This is equipped with a state-of-the-art system that ensures that your queries get
handled efficiently and promptly
CASH ADVANCE FACILITY
With An ICICI Bank Card in your wallet, you will never be strapped for cash. You can
withdraw cash on your Card, 24-hours a day, from any Visa participating member
bank ATM.
During banking hours you can also withdraw cash, over-the-counter, from any ICICI
Bank branch across the country.
For your protection we have limited the maximum withdrawal to Rs.15,000 in a
single day. Transaction charges as applicable will be charged.
[Type text]
DIAL-A-DRAFT
It is now possible to order a draft from the convenience of your home. Simply call the
ICICI 24-hour Customer Call Center and ask for a draft, payable anywhere in India
and favoring any company or individual (you can order a draft up to the available
limit cash limit on your account). The draft will be delivered to your mailing address.
For each draft request, a transaction fee of 1.0% of the amount withdrawn, subject to a
minimum of Rs.50, will be levied. However, for the Gold Credit Card-Members, no
transaction fee will be levied. In addition to the transaction fee, a service charge will
also be levied from the date of transaction to the date of repayment. The amount of the
draft will be billed in your monthly credit Card statement. And with the revolving
credit facility you can choose to pay as little as 5% of the billing amount
ICICI BANK CREDIT CARD
TRUE BLUE
-India's first value for money card.
-Web based access to get details about your statements, payment status and requests.
-24 Hour Customer Call Center and access to all VISA approved ATMs.
-Lowest annual fees of Rs.300.
-Dial-A-Draft at 1% fee. Accepted across 1,10,000 merchant establishments in India
and Nepal.
-Accident Insurance of up to Rs 3 Lakhs. Purchase Protection of Rs. 10,000 Credit
Shield of Rs. 10,000.
-Earn while you spend - ICICI Plus - Reward Program.
-Airlines and Railway Bookings.
-Accepted at selected petrol stations.
STERLING SILVER CARD
-Free add-on Card Web based access to get details about your statements, payment
status and requests.
-24 Hour Customer Call Center and access to all VISA approved ATMs.
-Comprehensive Insurance for both Primary and add-on cards Dial-A-Draft at 1% fee.
[Type text]
-Balance Transfer at 1.75% Comprehensive Travel Benefits Purchase protection of
Rs. 20,000 ---Credit Shield of Rs. 25,000 Earn while you spend - ICICI Plus - Reward
Program.
-Bandhan, Add on Card with self set limits.
-India's first value for money card. Accepted across 1,10,000 merchant establishments
in India and Nepal. Accident Insurance of up to Rs 6 Lakhs.
-Airlines and Railway Bookings accepted at selected petrol stations.
SOLID GOLD CARD
-International validity at over 18 million merchant establishments globally.
-Lowest annual fee of Rs. 1200 Web based access to get details about your statements,
payment status and requests.
-24 Hour Customer Call Center and access to all VISA approved ATMs.
-Dial-A-Draft free. Balance Transfer facility at 1.5% Zero lost card liability.
-Complimentary Global One Calling Card. Access to Global Customer Assistance
Services.
-Purchase Protection of Rs. 40,000.
-Credit Shield of Rs.50,000. Comprehensive Travel benefits.
-Bandhan, Add on Card with self set limits. Comprehensive Insurance for both
Primary and add-on cards.
-Airlines and Railway Bookings accepted at selected petrol stations household and
baggage -Insurance. Earn while you spend - ICICI Plus - Reward Program.
-Personal accident, household and baggage insurance.
Emergency Assistance Services
The multilingual VISA Emergency Assistance Services program offers worldwide
emergency referral assistance to VISA Gold Cardholders. These include a wide range
of legal, medical and other services. VISA Emergency Assistance Services are
available to you placing a call to the Emergency assistance Centers in Singapore: 1800-345-1345, UK: 0800-89-1725, USA: 1-800-336-8472 and Australia: 1-800805341.
[Type text]
Emergency Message Service
You can call toll free or collect on the 24-hour telephone service and leave messages
that will be forwarded in the shortest possible time.
Medical Assistance
In medical emergencies, you get assistance and referral services, emergency
transportation assistance to a hospital, repatriation to your country of residence and
assistance in case you need a prescription filled or a lost prescription replaced.
Legal Assistance
For legal emergencies, VISA will refer you to local legal advisors.
Travel Assistance
The Visa Emergency assistance Centre can arrange for booking emergency tickets and
also assist you with lost ticket reimbursement procedures. In case your luggage is lost
while travelling, the VISA Emergency Assistance Centre can arrange for the shipment
of replacement items and obtain any applicable insurance.
Translation Service
You get foreign language assistance services in all major foreign languages over the
telephone, and assistance in locating local interpreters.
Payment for Visa Emergency Services
All expenses for services rendered under the VISA Emergency Assistance
programmes if applicable will have to be borne by the Cardholder.
All services provided are subject to Terms & Conditions of the VISA Emergency
Assistance Services program.
[Type text]
[Type text]
Choose which of these features* you would benefit from the most...
- Balance Transfer at a lower interest rate
- Hassle-free travel
- Utility bill payments made easy
- Repaying loyalty with interest
- Wide acceptance
- Cash at your fingertips
- Add-on Cards
- Save while you spend (Reward Points)
- Privileged Pricing on Loans
- Repayments made easy
- No liability on lost card
- Protecting you through insurance
The HDFC Bank Health Plus Credit Card is a feature rich credit with unique features
like:
1. Cashless Mediclaim
The card offers free mediclaim cover for Rs.50,000/- plus a critical illness cover of
Rs.1.5 lakhs. The critical illness cover includes open-heart surgery & CABG, Cancer,
Kidney Failure and Vascular Stroke. With this cover you can avail cashless mediclaim
facility at any of the networked hospitals of the Third Party Administrator (TPA) in
any city.
2. Discounts at participating hospitals
With this card, the best of medical care would cost you less. Get fabulous discounts
on annual health check-ups, outpatient and inpatient investigations in the participating
hospitals in each city.
3. Preferred partners for a healthy life
HDFC Bank Health Plus Credit card offers unique discounts and offers from leading
health and fitness related brands.
[Type text]
4. Give your family the extra protection
a) Add-on Float Cover
You have the option of extending the Rs.50,000 mediclaim plus a critical illness cover
Rs.1.5 lakhs cover to the add-on cardholders, be it your spouse, children, brothers or
sisters .Whats more, the add-on cardholders can avail the discounts at participating
hospitals as well as with preferred partners.
b) Purchase additional mediclaim
Provide extra cover for your family which includes your spouse, children, parents,
brothers or sisters by purchasing additional mediclaim at fabulous discounts of more
than 50%. Whats more, you can get tax break under Section 80 D of the Income Tax
Act.
c) Life Insurance Cover
To overcome the uncertainties of life you need to plan ahead and create a circle of
protection for your family. With the HDFC Bank Health Plus Credit card you can get
your life insurance cover from Birla Sun Life Insurance at exclusive premium rates.
1. Save while you spend (Reward Points)
Use your credit card and earn reward points. For every Rs.100 spent using your credit
card earn 1 reward point. You can redeem the reward points for house-holder's
insurance which includes, fire insurance, burglary insurance and breakdown insurance
or for exciting gifts. What's more - you can save the reward points up to 18 months.
2. Protecting through insurance
The HDFC Bank Health Plus Credit Card offers you the most comprehensive
insurance package at no additional cost. In case of death in an accident if the
cardholder loses his life in an air accident, the nominated kin will receive a
compensation of Rs.10 lakhs. In the case of a rail or road accident the nominated kin
will receive a compensation of Rs.2 lakhs.
3. Balance Transfer at Lowest interest rates
Most cards charge interest at the rate of 2.95% per month. Transfer the same balance
to HDFC Bank's credit card and you will pay interest at the rate of only 1.65% per
[Type text]
month. For existing customers of HDFC Bank, we offer a special rate of 1.45% per
month for 6 months.
4. Utility Bill payments made easy
Pay your insurance premium, electricity / telephone / mobile bills using this service.
5. Hassle Free Travel**
Dreams of a quiet family vacation are often ruined by hassles of travel bookings.
Now with the HDFC Bank International Health Plus Credit Card, book your train and
air tickets from the comfort of your home or office.
a) Airline & train ticket bookings
Avail a 3.5% discount on domestic and 5.5% discount on international travel as also
free home delivery on all your bookings as a valued HDFC Bank card holder. Our tieup with SITA Travels for booking of train tickets.
Add-on Cards
Get up to 2 supplementary cards for your spouse, parents, siblings (own
brother/sister), son and/or daughter (over 18 years) and allow them to enjoy the many
benefits of a HDFC Bank International Health Plus Credit Card.
10. Privilege Pricing on Loans
As a HDFC Bank International Health Plus Credit Card holder you get loans from the
bank at special rates.
The rate discount offered is as follows:
Loan
Auto Loans
Discount Offered
0.5%
Personal Loans
1%
Car Loans
1%
1%
[Type text]
CARD FEATURES:
Supplementary Multiple
NIL
NIL
Rs.199
Rs.349
Rs.199
Rs.349
[Type text]
Balance Transfer Option
Transfer your outstanding balance from your other credit cards to the global Standard
Chartered credit card at only 1.75% p.m. instead of the 2.95% p.m. that you are
currently paying.
Global Acceptance
The most widely accepted and respected credit card in over 19 million VISA and
MasterCard establishments worldwide over 1.1 lakh establishments in India and
Nepal.
Revolver Facility
Flexible payment option using revolving credit allowing you to pay just 5%of the
outstanding amount every month.
Cash Advance Facility
Up to 30% of the credit limit. Withdraw cash from 6 lakh MasterCard ATMs
worldwide and 580 ATMs across 46 cities in India.
Teledraft
Facilities with doorstep delivery.
Picture Card
Put a picture that is close to your heart and makes your card as unique as you want it
to be.
Photo Card
Safest credit card
[Type text]
Income Criteria
Product
Gross
Gold
1,50,000
1,50,000
Executive
1,00,000
1,00,000
Classic
60,000
72,000
Sapnay
60,000
72,000
Income
[Type text]
CARD FEES
The membership fees for the global card is
Gold
Executive
Classic
Sapnay
Entrance Fee
1000
300
100
Nil
2000
1200
700
400
2000
1200
750
400
500
350
250
575
400
250
card
(no 1000
entrance)
*An additional fee of Rs. 100 will be charged for the picture card
[Type text]
[Type text]
abroad) for one point. HSBC, on the other hand, only allows points collected to be
squared against a discount on the annual fees. A minimum of 350 points is needed to
get a discount on the annual fee. Citibank awards one point on spending Rs100.The
table below gives an indication of the various value added services on offer from
various banks.
Amex
Yes
Yes
Yes
Yes
Yes
Yes (G)
Yes
Yes
Yes
Accident insurance
Yes
Yes
Yes
Yes
Yes
Yes
Yes*
Yes
[Type text]
holder gets a 5% discount on all AMCO and Exide make batteries from authorized
dealers and Rs1,000 off at select outlets for MRF auto coat car painting charges.
There is also the Times card and Bharat Petroleum BOB card. These cards give you
discounts at several outlets. For example the Mahindra Stan chart card gives you
priority check-in and check-out facilities at Guest line hotels (run by Mahindras).
[Type text]
RESEARCH
METHODOLOGY
[Type text]
[Type text]
RESEARCH METHODOLOGY
(A) Sampling unit (whom to survey) - Deciding whom to survey requires that the
universe or boundaries of the market from which data is sought, data is defined so
that an appropriate sample can be selected. In my study the people surveyed are
the service class and business class people who use credit cards in NCR.
(B) Sample size (how many to survey) - It depends both on the size of the budget
and the degree of confidence that the marketer want to place in the findings. The
larger the sample the more likely the responses will reflect the total universe
under study. The sample size in this study includes 60 persons.
(C) Sampling procedure To carry out this project I have used non- probability
sampling where the researcher selects the most accessible population members from
whom to obtain information and the researcher uses his or her judgment to select the
population members who are good source for accurate information.
[Type text]
DATA COLLECTION
PRIMARY DATAThe primary data collected is through a questionnaire consisting of all types of
questions like ranking, dichotomous and open ended questions. The questionnaires
were supplemented by an interview to reach to better conclusions.
SECONDARY DATA
The Secondary data is collected through internet and various brochures collected from
the banks itself some of the information required was also collected from the various
magazines.
[Type text]
DATA ANALYSIS
[Type text]
Non-users
15
[Type text]
Ans-2
The distributions of various bank credit cards out of the 60 people are:
BANK NAME
CITI BANK
ICICI
STAN CHART
HDFC
[Type text]
Ans-3
The number of years since when people have been using the credit cards minimum
being one year and maximum greater than three years :
NUMBER OF YEARS
1 Year
2 Year
3 Year
> 3 Year
NUMBER OF PEOPLE
6
8
28
18
[Type text]
Ans-4
The distribution of whether people are satisfied with the current credit card service
they are using:
SATISFIED
47
NOT SATISFIED
13
[Type text]
Ans-5
The ranking of various parameters as per preference of people while choosing a credit
card service of any bank:
FEATURES
Annual fees
Convenience
Forward Bal
Cash Advance
Brand Name
APR (interest)
RANK 1
24
17
21
18
16
38
RANK 2
15
8
7
14
7
8
RANK 3
6
12
13
7
18
5
RANK 4
7
14
9
5
5
4
RANK 5
4
3
4
12
4
3
RANK 6
4
6
6
4
10
2
[Type text]
Ans-6
The influence of media in affecting the purchase decision of consumers for credit
cards can be depicted as:
MEDIA
NUMBER OF
PEOPLE
Newspapers
Word of Mouth
Representative from banks
Television
Internet
22
38
47
20
14
[Type text]
Ans-7
The reasons why people are tending towards the use of credit cards, the factors that
influence are:
REASONS/FACTORS
Spending Flexibility
Perfect for emergencies
Added benefits
Status symbol
Convenient to carry
All of the above
NUMBER OF PEOPLE
18
9
16
8
12
42
[Type text]
Ans-8
The people had different opinions as to whether the credit card increases the
purchasing power of consumers or not they are stated as:
OPINION
Yes
No
Cant say
NUMBER OF PEOPLE
30
22
8
[Type text]
Ans-9
The reasons why people think that using a credit card has increased the purchasing
power of the consumers are:
REASONS
3-4 weeks time before payment
Impulse purchase
Freedom from cash
Cash advance
NUMBER OF PEOPLE
37
38
43
28
[Type text]
Ans-10
When the people were asked to compare debit cards and credit cards the people had
different opinion they are stated as follows:
OPINIONS
Both are equally good
Debit cards are better
Credit cards have more advantages
Cannot be compared
NUMBER OF PEOPLE
17
14
20
9
[Type text]
Ans-11
Reasons why some people find the use of credit cards as a disadvantage are :
REASONS
Misuse if lost or misplaced
Financial burden
High interest rates
Cant be used at all places
All of the above
NUMBER OF PEOPLE
23
32
12
17
14
[Type text]
FINDINGS
FINDINGS
[Type text]
The findings of the project through primary data collection source are summarized as
follows :
Out of the 60 people surveyed 75% people use the credit cards and 25%
people were not using the credit cards but were aware about the services of the
credit cards.
The association of the people with the credit cards for most of the people is 3
years which shows that credit cards had gained popularity ling time back in
India.
Out of the 60 people surveyed 78% people were satisfied with the current
services of credit cards they were using and 22% people were not satisfied
with the services.
The study also reveals that most of the people ranked annual percentage rate
or interest paid to be the most important factor before going in for any credit
card followed by the annual fees and value of forward balance.
For most of the people the influence was the representatives of the bank or the
word of mouth that includes friends & relatives.
For most of the people the use of credit cards was gaining importance because
of reasons like they are convenient to carry, there is freedom from cash, then
due to facilities like cash advance, for some it was also a means of status
symbol.
60% people say that credit cards have increased their purchasing power while
44% people say that it has not affected the purchasing power much and 16%
people are indifferent to this question.
30% of the people say that the reason for the increase in purchasing power is
that they get the freedom to carry much cash for 26% of the people the reason
[Type text]
is that they get involved in impulse purchase and for around 25% of the people
the reason is that u can buy today n pay later.
When asked to compare the credit cards and the debit cards the 34% of people
said that credit cards have more advantages while 28% say that debit cards are
better while around 25% are of the view that both are equally good rest are of
the opinion that they have different features and benefits so cannot be
compared.
[Type text]
REVIEWS
[Type text]
Its plastic money. You just know when you use it and being easy to carry and
use, you do not think twice before spending. Wow! Wonderful again to find
that you have to make the payment after almost 20 days after the arrival of the
same and if you spend in the beginning of the month, you end up making
payments after almost 50 days. Great::::: isnt it? I would say it would rather
be cruel to take money through credit cards from the person who does not
even earn the amount, which he is now spending. If he goes bankrupt or does
not get a monthly salary, imagine the level of mental disorder the person could
go through especially when he has the entire family to handle too. Its difficult
to change a habit and using a card would then be a habit for the one who starts
using it regularly. Again in a habit you always raise the level of wrong
consumption, which is the same when you start using a card. Using a credit
card could be as dangerous as probably commencing to smoke or falling for
one single female who does not even want to know you. As compared to a
credit card, the better option would be to go for a Debit Card, where you just
need to take care of the fact that you have enough amounts in your bank
account to use it. Whenever you use it.
Credit isnt your worst enemy. You are. Just like anything else in moderation is
good, so is credit. Use your discretion before you decide to pull out the plastic.
If you decide to splurge, do it within your means. All credit does is give you
the leverage over your current financial situation to spend more than you can
with your own money. But the buck (literally) stops there. Unless you have a
compelling reason to buy whatever it is you need, I would recommend going
easy on your extra capital.
At the temptations of a credit card. The more you have the richer you are??
The glory is so painfully short lived. One careless extravagant moment and
you could spend the rest of your life paying for it. So keep those urges down.
Limit yourself to ONE credit card that you use in case of emergencies or in
cases where the only payment method is your credit card.
[Type text]
Having said all the above, heres the parting shot. Credit can be your maker or
breaker. What you choose to do with it is entirely up to you. Tempting as it
might be, theres a huge downside to credit, which is you OWE money to
someone else! And if you know you cant pay back what you owe, dont pay
in the first place. Theres nothing like buying what you want with your honest
hard earned money. At the end of the day those are the things that make you
smile because they are truly yours.
[Type text]
CONCLUSIONS
[Type text]
CONCLUSIONS
With respect to the primary data and informations collected I have reached to the
following conclusions in my project. My primary data that is the survey helps me to
practically analyze the data which I collected through internet and magazines
especially the reviews and critics comments about the use of credit cards:
(A) Looking at the current scenario we can well identify that the credit card is taking
a upper trend in India due to which more and more customers getting attracted
towards it.
(B) The study leads to mixed responses because out of 60 people surveyed half of
them were in favour of the fact that credit cards increase their purchasing power
while the other half were of the view that it doesnt because people have
understood and realized the fact that although they have to pay later but they
have to pay from their pocket.
(C) Thus as per the survey conducted and the study made through the analysis it was
found out that credit cards do increase the purchasing power of the consumers
but to a certain extent because it gives them the liberty to pay later but the
consumers are becoming smarter and have understood the scenario quite well so
we cannot say that it altogether affects the buying habits because they have
realized that will have to face the financial burden later on.
(D) Since many customers are increasing and so the number of defaulters also. Due
to the increase in tendency of non repayments the bad debts of bank keep on
increasing.
(E) To add the popularity of the card and to increase the numbers of users the banks
are more liberalized in attracting new consumers.
(F) The media plays a very important role in attracting the customers to choose a
particular bank and its services and it can also help to retain the acquired
customers also.
[Type text]
RECOMMENDATIONS
[Type text]
RECOMMENDATIONS
According to analysis the annual fee rate and APR rate is the most preferred
criteria for the selection of the credit cards as per the preferance of the
respondents so banks should take efforts to make these rates more affordable
in order to increase the customer base.
Bank should try to convinence their customer to use credit card facilities to
save time and for convenience.
The bank should issue such type of credit cards which can be easy to use by
the middle income groups.
Effort should be taken to avoid the cases of double dipping in order to make
the use of credit cards more trust worthy.
Credit Card provides more advantages as compared to Debit cards like later on
payments without any charges for the specified periods and many others
which increases the purchasing power of the consumers, so banks should take
measures to create more awareness among the consumers regarding the
advantages of the credit cards to increase its use.
Since the bank provide added benefits with the purchases through credit cards
to the cardholders so banks should increase its accessibility to the larger
section of the society.
[Type text]
LIMITATIONS
OF THE STUDY
[Type text]
In my study I found that the knowledge of the people about the credit card is
limited.
A simple questionnaire has been adopted so that the person can easily respond
to the questions about the credit card especially the middle class people.
Sample is limited to a particular area so the views can differ on the region
basis.
[Type text]
BIBLIOGRAPHY
[Type text]
BIBLIOGRAPHY
Website :
1-www.icici.com
2-www. citi bank.com
3- www.standard chartered.com
4- www.rbi.co.in
[Type text]
QUESTIONNAIRE
[Type text]
Market Survey to study consumer behavior
For credit cards
DISS/CC: ______
Name:
______________________________________________________
Organization: _____________________________________________________
Designation: ______________________________________________________
Address:
_______________________________________________________
Phone (O): _______________________________________________________
Q.1)
No [ ]
If yes go to Q.2
If No go to Q.5
Q.2)
Q.3)
Q.4)
Q.5)
a. 1 year
[ ]
b. 2 years
[ ]
c. 3 years
[ ]
Are you satisfied with the credit card service you are using:
a. very much satisfied
[ ]
b. partially satisfied
[ ]
c. satisfied
[ ]
d. not satisfied
[ ]
No [ ]
[Type text]
Q.6)
choosing
Q.7)
RANK
What influenced you to use or will influence you to use a credit card:
a. Newspaper
Q.8)
[ ]
b. Word of mouth
[ ]
[ ]
d. Television
[ ]
e. Internet
[ ]
Which of the following factors attracted you most or will attract you
most for using a credit card:
Q.9)
using)
a. Spending Flexibility
[ ]
[ ]
c. Added benefits
[ ]
d. Status Symbol
[ ]
e. Convenient to carry
[ ]
[ ]
Do you think using a credit card has increased or can increase (if not
the purchasing power of consumers:
a. Yes [ ]
b. No [ ]
c. cant say [ ]
[Type text]
Q.10) Why do you think credit cards have increased your purchasing power:
a. With credit cards you get at least 3-4 weeks before
b. you have to pay
[]
[]
[]
[]
[]
Q.11) Which of the following disadvantages of credit cards do you agree with:
a. Misuse of credit cards if lost or misplaced
[ ]
[ ]
[ ]
[ ]
[ ]
Q.12) any suggestions or additional features you would like with credit cards: