-Description Page No.

Students Declaration 1

Certification by Supervisor 2

Acknowledgement 3

Contents with page no. 4

Introduction to topic 5-40

Objectives 41

Research Methodology 42-45

Analysis & Interpretation 46-60

Limitations 61

Recommendations and Conclusion 62-64

Appendices 65-66

Bibliography 67
 Chapter I- Introduction

Customer perception is a marketing concept that encompasses a customer's

impression, awareness and/or consciousness about a company or its offerings.
Customer perception is typically affected by advertising, reviews, public relations,
social media, personal experiences and other channels. Consumers can
evaluate a product along several levels. Its basic characteristics are inherent to
the generic version of the product and are defined as the fundamental
advantages it can offer to a customer. Generic products can be made distinct by
adding value through extra features, such as quality or performance
enhancements. The final level of consumer perception involves augmented
properties, which offer less tangible benefits, such as customer assistance,
maintenance services, training, or appealing payment options. In terms of
competition with other products and companies, consumers greatly value these
added benefits when making a purchasing decision, making it important for
manufacturers to understand the notion of a total package when marketing to
their customers. For example, when manufacturing automotive parts, a high-
performing product will provide the customer base with basic benefits, while
adding spare parts, technical assistance, and skill training will offer enhanced
properties to create a total package with increased appeal to consumers.

Perception is not good or bad, right or wrong, it is just the way someone judges
an experience based on their value system of what they believe should happen.
Since people are unique, each of their perceptions are unique .On the other hand
each situation is a "point of contact" with an employee that will tell the customer a
"truth" about the company's idea of customer service. Each situation will create
expectations of what the next experience will probably be like. Companies spend
considerable amount on advertisement and in this world of competitive
advantage advertisement has to be repetitive in nature. Brand hammering results
in brand recall which is a costly affair. So companies need to understand the
Customer.

Credit Card

Definition

A credit card is a small plastic card issued to users as a system of payment. It

allows its holder to buy goods and services based on the holder's promise to pay
for these goods and services. The issuer of the card creates a revolving account
and grants a line of credit to the consumer (or the user) from which the user can
borrow money for payment to a merchant or as a cash advance to the user. A
credit card is different from a charge card: a charge card requires the balance to
be paid in full each month. In contrast, credit cards allow the consumers a
continuing balance of debt, subject to interest being charged. A credit card also
differs from a cash card, which can be used like currency by the owner of the
card. Most credit cards are issued by banks or credit unions, and are the shape
and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as
85.60 53.98 mm (3.370 2.125 in) (33 /8 21 /8 in) in size.

History

The concept of using a card for purchases was described in 1887 by Edward
Bellamy in his utopian novel Looking Backward. Bellamy used the term credit
card eleven times in this novel.[2] The modern credit card was the successor of a
variety of merchant credit schemes. It was first used in the 1920s, in the United
States, specifically to sell fuel to a growing number of automobile owners. In
1938 several companies started to accept each other's cards. Western Union
had begun issuing charge cards to its frequent customers in 1921. Some charge
cards were printed on paper card stock, but were easily counterfeited. The
Charga-Plate, developed in 1928, was an early predecessor to the credit card
and used in the U.S. from the 1930s to the late 1950s. It was a 2" 1"
rectangle of sheet metal related to Addressograph and military dog tag systems.
It was embossed with the customer's name, city and state. It held a small paper
card for a signature. In recording a purchase, the plate was laid into a recess in
the imprinter, with a paper "charge slip" positioned on top of it. The record of the
transaction included an impression of the embossed information, made by the
imprinter pressing an inked ribbon against the charge slip.[3] Charga-Plate was a
trademark of Farrington Manufacturing Co. Charga-Plates were issued by large-
scale merchants to their regular customers, much like department store credit
cards of today. In some cases, the plates were kept in the issuing store rather
than held by customers. When an authorized user made a purchase, a clerk
retrieved the plate from the store's files and then processed the purchase.
Charga-Plates speeded back-office bookkeeping that was done manually in
paper ledgers in each store, before computers. The concept of customers paying
different merchants using the same card was implemented in 1950 by

Ralph Schneider and Frank McNamara, founders of Diners Club, to consolidate

multiple cards. The Diners Club, which was created partially through a merger
with Dine and Sign, produced the first "general purpose" charge card, and
required the entire bill to be paid with each statement. That was followed by
Carte Blanche and in 1958 by American Express which created a worldwide
credit card network (although these were initially charge cards that acquired
credit card features after BankAmericard demonstrated the feasibility of the
concept). However, until 1958, no one had been able to create a working
revolving credit financial instrument issued by a third-party bank that was
generally accepted by a large number of merchants (as opposed to merchant-
issued revolving cards accepted by only a few merchants). A dozen experiments
by small American banks had been attempted (and had failed). In September
1958, Bank of America launched the BankAmericard in Fresno, California.
BankAmericard became the first successful recognizably modern credit card
(although it underwent a troubled gestation during which its creator resigned),
and with its overseas affiliates, eventually evolved into the Visa system. In 1966,
the ancestor of MasterCard was born when a group of California banks
established Master Charge to compete with BankAmerica; it received a
significant boost when Citibank merged its proprietary Everything Card (launched
in 1967) into Master Charge in 1969. Early credit cards in the U.S., of which
BankAmericard was the most prominent example, were mass produced and
mass mailed unsolicited to bank customers who were thought to be good credit
risks. But, They have been mailed off to unemployables, drunks, narcotics
addicts and to compulsive debtors, a process President Johnsons Special
Assistant Betty Furness found very like giving sugar to diabetics. [4] These
mass mailings were known as "drops" in banking terminology, and were outlawed
in 1970 due to the financial chaos that they caused, but not before 100 million
credit cards had been dropped into the U.S. population. After 1970, only credit
card applications could be sent unsolicited in mass mailings. The fractured
nature of the U.S. banking system under the GlassSteagall Act meant that credit
cards became an effective way for those who were traveling around the country
to move their credit to places where they could not directly use their banking
facilities. In 1966 Barclaycard in the UK launched the first credit card outside of
the U.S. There are now countless variations on the basic concept of revolving
credit for individuals (as issued by banks and honored by a network of financial
institutions), including organization branded credit cards, corporate-user credit
cards, store cards and so on. Although credit cards reached very high adoption
levels in the US, Canada and the UK in the mid twentieth century, many cultures
were more cash-oriented, or developed alternative forms of cash-less payments,
such as Carte bleue or the Eurocard (Germany, France, Switzerland, and
others). In these places, adoption of credit cards was initially much slower. It took
until the 1990s to reach anything like the percentage market-penetration levels
achieved in the US, Canada, or UK. In some countries, acceptance still remains
poor as the use of a credit card system depends on the banking system being
perceived as reliable. Japan remains a very cash oriented society, with credit
card adoption being limited to only the largest of merchants, although an
alternative system based on RFIDs inside cellphones has seen some
acceptance. Because of strict regulations regarding banking system overdrafts,
some countries, France in particular, were much faster to develop and adopt
chip-based credit cards which are now seen as major anti-fraud credit devices.
Debit cards and online banking are used more widely than credit cards in some
countries. The design of the credit card itself has become a major selling point in
recent years. The value of the card to the issuer is often related to the customer's
usage of the card, or to the customer's financial worth. This has led to the rise of
Co-Brand and Affinity cards - where the card design is related to the "affinity" (a
university or professional society, for example) leading to higher card usage. In
most cases a percentage of the value of the card is returned to the affinity group.

How credit cards work

Credit cards are issued by a credit card issuer, such as a bank or credit union,
after an account has been approved by the credit provider, after which
cardholders can use it to make purchases at merchants accepting that card.
Merchants often advertise which cards they accept by displaying acceptance
marks generally derived from logos or may communicate this orally, as in
"Credit cards are fine" (implicitly meaning "major brands"), "We take (brands X, Y,
and Z)", or "We don't take credit cards". When a purchase is made, the credit
card user agrees to pay the card issuer. The cardholder indicates consent to pay
by signing a receipt with a record of the card details and indicating the amount to
be paid or by entering a personal identification number (PIN). Also, many
merchants now accept verbal authorizations via telephone and electronic
authorization using the Internet, known as a card not present transaction (CNP).
Electronic verification systems allow merchants to verify in a few seconds that
the card is valid and the credit card customer has sufficient credit to cover the
purchase, allowing the verification to happen at time of purchase. The verification
is performed using a credit card payment terminal or point-of-sale (POS) system
with a communications link to the merchant's acquiring bank. Data from the card
is obtained from a magnetic stripe or chip on the card; the latter system is called
Chip and PIN in the United Kingdom and Ireland, and is implemented as an EMV
card. For card not present transactions where the card is not shown (e.g., e-
commerce, mail order, and telephone sales), merchants additionally verify that
the customer is in physical possession of the card and is the authorized user by
asking for additional information such as the security code printed on the back of
the card, date of expiry, and billing address. Each month, the credit card user is
sent a statement indicating the purchases undertaken with the card, any
outstanding fees, and the total amount owed. After receiving the statement, the
cardholder may dispute any charges that he or she thinks are incorrect (see 15
U.S.C. 1643, which limits cardholder liability for unauthorized use of a credit
card to $50, and the Fair Credit Billing Act for details of the US regulations).
Otherwise, the cardholder must pay a defined minimum proportion of the bill by a
due date, or may choose to pay a higher amount up to the entire amount owed.
The credit issuer charges interest on the amount owed if the balance is not paid
in full (typically at a much higher rate than most other forms of debt). In addition,
if the credit card user fails to make at least the minimum payment by the due
date, the issuer may impose a "late fee" and/or other penalties on the user. To
help mitigate this, some financial institutions can arrange for automatic payments
to be deducted from the user's bank accounts, thus avoiding such penalties
altogether as long as the cardholder has sufficient funds. Advertising, solicitation,
application and approval Credit card advertising regulations include the Schumer
box disclosure requirements. A large fraction of junk mail consists of credit card
offers created from lists provided by the major credit reporting agencies. In the
United States, the three major US credit bureaus (Equifax, TransUnion and
Experian) allow consumers to opt out from related credit card solicitation offers
via its Opt Out Pre Screen program.
CARD MECHANISM

1. The Participants

-> The Cardholder, Merchant Establishment, Acquiring Bank and the Issuing
bank are the principal participants of credit card. Role of participants
involved in the credit card operations is discussed in the following
paragraphs.

a. Cardholder

The cardholder is the person in whose name the card is obtained. The
person is in possession of the card and legally entitled to buy goods
and services from Merchant establishments. He/she is under an
obligation to pay for the goods and services.
The cardholder enters into an agreement with the issuer to pay for the
goods and services bought on the credit card along with the various
applicable charges and interest due on the card.

b. Merchant Establishment

Merchant Establishment refers to the shop or a place of business, a

restaurant, or an airport booking counter, which accepts the card
offered by the cardholder as a means of payment for the goods or
services provided. It enters into an agreement with a bank, known as
the acquiring bank since it acquires the business from the Merchant
Establishment. Under this agreement, it provides goods and services
to the cardholder on credit and receives money from the acquirer or
the acquiring bank within a few days, generally 1-4 days. The
Merchant Establishment has to pay a commission to the acquirer for
the services provided. The commission generally ranges between 2%
and 5% of the total sale value. The acquirer provides the merchant
with charge slips, Electronic data Capture machines (EDCs) or
Brahmas, which are hand-operated machines.

c. Acquirer/Acquiring bank
The bank which acquires the business of the merchant and licenses
the merchant to accept credit cards of one or more of the world wide
issuing bodies such as Visa, Master, Discovery is the Acquiring Bank.
The acquirer need not always be a bank but can be a financial
institution too. The merchant provides his acquirer with the charge slips
for the days transactions, irrespective of whether the acquirer was the
issuer of the cards accepted by the merchant. The acquirer need not
necessarily be an issuer of the cards which will be accepted at the
Merchant Establishment.

d. Issuer/Issuing Bank

The issuing bank or institution issues the credit card to the card-holder.
The acquiring bank now presents the charge slip to the issuer. The
issuer pays to the acquirer the transaction amount minus its
commission and consolidates all transactions for each card issued,
then presents the charges to the cardholder in the form of the monthly
bill or Statement.
Working of Credit Card System

-> The customers can use the credit card for purchasing goods and
availing services from the various shopkeepers. When the customer
makes a purchase in a shop, instead of making payment, the card is
produced at the cash counter. The seller examines validity of the card
through a machine, which ratifies the sales. The bill is made in three
copies. The customer is given the bill on which his signature will be
affixed. The sale is complete. A copy of the bill is given to the customer.
Another is sent to the bank which has issued the credit card and the third
copy is retained by the seller. The bank on receiving various such bills of
the customer will prepare a consolidated bill and send it to the customer at
the end of the month. The customer will make a single payment to the
bank or allow the bank to debit from his account. In every bill, the due date
of payment will be given. If a customer fails to pay within the due date,
interest will be added on the purchase. It is also not necessary that the
customer should pay full payment of the bill as he can make part payment
and settle the bill in due course. However, the customer will have to pay
interest for the outstanding balance amount. If payment is made for all the
purchases, the customer is allowed to avail fresh credit. A credit limit is
fixed based upon the income of the customer. The customer can make
purchases only up to this credit limit. Once payment is made by the
customer, the credit limit will once again revolve to the original amount.
The sellers can avail the facility of sale through credit card by paying to
the credit card establishment, a fixed amount. The sellers agree to this as
it enhances their sale. On receipt of payment from customers, the seller's
account will be credited.
This process is explained in Exhibit 1
CREDIT CARD TRANSACTION

(Exhibit 1)
 3. Benefits Derived from Credit Card

The benefits obtained from the use of credit cards are discussed from the point of
view of

(a) Customer

Benefits a customer avails through a credit card :-

1. He/she can use it at any time on credit.

2. He/she need not carry cash for making purchases.

3. Any ticket reservation can be done by using credit card even during night when
banking facility is not available.

4. Credit card can be used through computers and to purchase mail order
business.

5. At any point of time, the customer will be able to know the available credit even
after purchases.

6. Credit card can be used even for withdrawing cash through Automatic Teller
Machine up to a certain limit.

7. The holders of credit card are given insurance cover by the banks.

8. It can be used for tax payment and electricity bills.

(b) Seller

The benefits of use of credit cards by buyers to sellers:-

(i) Sales can be effected throughout the year.

(ii) With increasing sales, the turnover of the seller increases.

(iii) The seller can go for competitive price as he can get credit from the bank.

(iv) Due to credit card facility, he can attract customers from far off places also.
(v) Durable goods can be sold easily through credit card.

(vi) Bad debts can be avoided as the bank arranges for payment under credit
card.

(vii) Sellers extending sales through credit card can also extend additional credit
to customers as they can receive payment in installment through the credit card.

(b) Commercial banks

With the availability of credit card facility

(i) More customers may avail the banking facility.

(ii) There may be less cash withdrawals from the bank corresponding to the
extent the customers use credit card for their purchase.

(iii) The bank, by extending credit to customer, retailer, wholesaler and

manufacturer is able to earn interest on the credit.

(iv) The credit facility is extended only in the books of accounts and there will be
no cash withdrawals. The account of the customer is debited for the purchases,
while the account of the seller is credited. Both the parties are given credit and
the bank enjoys interest on the loan.

(v) All the transactions in the country are done through the banking system, as a
result of which, the role of money lenders and other financiers are reduced.

(vi) The profit of the bank will also increase due to the extension of credit to
different parties.

(c) Central bank

As the Banks issue the credit cards, consumers use the same and merchant
establishments accept the card and the following benefits flow:

(i) A better control on the banking system is evolved by the Central bank.
(ii) During inflation, the Central bank can control the price level by instructing the
head office of commercial banks to reduce the quantum of credit extended to
customers under credit card. This will reduce the demand and thereby prices will
come down.

(iii) Central bank is able to take instantaneous action on the economy, as credit
card provides information regarding purchases and sales in the country.

(iv) The activity of Non Banking Financial Companies will also be reduced as the
credit card facility is extended to commercial banks. So, the Central bank need
not control NBFCs.

(v) By extending credit card facility to agriculturists, agricultural finance is

improved and this relieves the farmers from the clutches of money lenders.

(e) Government

From the point of view of a Government, use of credit cards by consumers will
help in the following ways:

(i) Whenever any sale is made, it is properly billed. That means sales tax
and commercial tax due to the government will not be evaded.
(ii) It prevents the growth of unaccounted money as all transactions are
recorded.
(iii) It improves the revenue of the government due to increase in
production by the manufacturers.
(iv) Government employees can also avail credit card facility against their
salaries.

(f) Economy

From the national economy point of view one can view the flow of the
following merits due to use of credit cards by consumers: The economy is
benefited when sales increase due to the improved activity in primary,
secondary and tertiary sectors. Transport system will improve with movement
of goods to different places. Exports will improve, which will increase the
earnings in foreign exchange. Employment opportunities may increase not
only in production centers but also in the service sector.
Credit Cards In India

India has came out of self-binding shackles to look "young" again and the
enthusiasm shared by the young work force of the country is driving the economy
like never-before. In the present day world, no one wants to be bothered by the
presence of huge cash in his or her wallet and the Indians are no exceptions.
The unprecedented growth in the number of credit card users has stimulated the
Indian economy by a significant extent. The arrival of malls, multiplexes, online
shopping stores and shopping complexes have contributed to the growth of the
use of plastic cards. It will not be wrong to say that such a scenario in context of
the Indian market is not driven by style statement and is driven more by needs.
The benefits of plastic money have offered unmatched ways to create an
equilibrium and offer an amicable solution when it comes to purchases and the
inability to possess or carry cash. The modern day Indian customers find it more
easy to make physical payment (credit card payments) rather than carrying too
much cash. The introduction of credit card facilities to pay for mobile, electricity,
movie tickets and other related transactions have also contributed to the growth
of plastic money in the country. Standard Chartered Bank in India is the largest
international banking Group in India. The Combined Balance Sheet (as at March
31, 2001) of SCB India is Rs. 24515.9 cr. and is having a combined customer
base of 2.4 million in retail banking and over 1200 corporate customers.
Standard Chartered India was the first to issue first global credit card in India, the
first to issue Photocard, the first Picture Card and was the first credit card issuer
to be awarded the ISO 9002 certification. Some other product innovations of
Standard Chartered Bank in India include the 'Sapnay' credit card, the
international debit card that provides free access to over 1500 Visa.

Future of credit cards in India

With high and industry-favourable figures as above, there is no doubt that the
rise in number of credit card providers and users have come of age. With these
positively-influencing trends expected to continue in the near and far-future, the
writing is on the wall. The credit card industry is likely to soar more than any
industry segment. To add to that, easy and continuous payments' structures with
each passing day and with every Bank poised to expand its network, the Indian
credit card user community is the biggest beneficiary. The intensifying
competition prevalent in the present day Indian credit card market has further
fuelled the usage of credit cards in the country like never-before. In an aim to
overpower the peers and to sustain and prosper themselves, the Banks and
financial institutions have started cutting down the interest rates and offering
lucrative deals. A number of companies are working hard to develop credit cards
that are safer and easier to use. In the very near future, a person will not have to
carry his plastic money for the payment purposes. Since the mobile number of
the user will act as his or her credit card number, there might not be any
requirement of carrying the credit cards all the time. In the recent times, Reserve
Bank of India informed that it was in the process of formulating the guidelines for
a payment system using mobile devices. Reserve Bank of India is discussing
with both public and private sector Banks, service providers and industry bodies
to develop the payment system for the mobile devices. The RBI had also stated
that draft guidelines would be placed on its official website by the 15th of June,
2008. In the countries like India, the usage of mobile is growing rapidly.

There are about 250 million mobile phone connections in the country, whereas
the credit card holders are far lower in comparison to number of mobile phone
connections. Therefore, using the mobile phones for making payments may take
some more time in getting implemented. The RBI said in its policy statement said
that the quick elaboration of this mode of payment and transactions have thrown
up a new delivery channel for banks. This channel will certainly assist small value
payments to merchants, utility service providers. In addition, the speed with
which the money will get transferred at a low cost will make this process really
useful. Credit card market is going to witness some more innovative changes in
the present year. The outcome product of the joint venture between Life
Insurance Corporation of India and GE Money is likely to touch the market by the
end of this year. In the first year of its launch, the company will provide this card
to the LIC customers and policy holders only. This venture is an outcome of very
solid research works. It includes a 30 per cent stake for GE Money, while LIC
Housing Finance Company, LIC Mutual Fund and Corporation Bank each have a
5 per cent stake each in the venture. The Life Insurance Corporation will have 40
percent of stake in the company. LIC has invested around Rupees 150 crore in
this plan. LIC has yet not taken any decision about the remaining 15 per cent
stake of the total investments. In another development, ABN AMRO and
MakeMyTrip.com have launched a distinctive co-branded credit card. The card is
named as the 'Go Card'. This card offers special reward benefits and good range
of travel-related promotional packages to its users. Credit cards and debit cards,
or automated teller machine (ATM) cards, commonly referred to as plastic
money, are undergoing tremendous changes across the globe. In order to
improve security and reduce frauds in plastic cards and card payment
transactions, authorities, researchers and innovators are searching for newer
ways. This has resulted in many countries shifting to the more secure Europay,
MasterCard and Visa (EMV) chip cards with personal identification numbers
(PIN). However, countries like the US, China and India are still using the older
magnetic strip cards (MSDs) and signature, or PIN verification, for plastic cards
transactions. In the US, the resistance to change is primarily due to the cost of
migration to EMV, as profitable revenue channels associated with current
interchange fees do not offset the cost of re-carding. In China there is a strong
legal framework to handle financial frauds, which acts as a deterrent to
fraudsters. On the other hand, over 99% of the total cards issued in India are
based on magnetic strips. Interestingly, about 90% of the existing point of sales
(POS) terminals in the country, managed by 21 acquirers (among them Axis
Bank, HDFC Bank and ICICI Bank), can accept EMV chip cards and PIN.
However, not all ATMs are equipped to do the same. Only 50% of the existing
ATMs with minimal software and hardware upgrades can accept EMV chip cards.

The rest of the ATMs would need major hardware upgrades, or even
replacement, to enable EMV chip card acceptance. A majority of the lenders, who
have installed around 70,000 ATMs across the country, are also not keen to
spend on upgradation. There is a reason for this. According to Reserve Bank of
India (RBI) rules, any cardholder can use another lender's ATM free of cost, for
up to five transactions each month. This means, that many lenders are serving
many who are not their customers, through ATMs, without earning much revenue
from these transactions. On the other hand, lenders earn commission on each
transaction through the POS terminals. In the period between March 2010 and
February 2011, the total spends value in India on credit and debit cards, including
e-commerce, interactive voice response (IVR) and mail order/telephone-order
(MOTO) transactions, was Rs1.13 lakh crore. In the same period, India had 22.2
crore debit cards and 1.8 crore credit cards, while there were 5.6 lakh POS and
around 70,000 ATMs installed. The industry reported a loss of Rs13 crore due to
stolen and counterfeit card frauds. While the fraud-to-sales ratio came at 1.4
basis points (bps), early cases of domestic counterfeit and skimming are on the
rise. Certain issuers such as Citibank and State Bank of India issue Maestro
debit cards. Maestro debit cards are magnetic stripe cards that require a PIN to
be entered at the POS terminal. Citibank's experience has been that card usage
levels are significantly lower when a PIN is required to be entered at the POS
terminal. No wonder that a majority of cards require the user to use the PIN only
for ATM transaction and not at POS. A few large card-issuing lenders like
Citibank, ICICI Bank, HDFC Bank and SBI issue EMV chip cards, while for most
other banks the host systems are not ready and have not been certified for
issuance of chip card. However, these banks are issuing chip-based cards to
customers who frequently travel abroad and have high credit limits. In addition,
all these cards use signatures as a second authentication instead of the global
practice of using PINs. However, MSDs and PIN are susceptible to skimming or
counterfeit frauds. This has forced many countries to adopt the EMV chip card
and PIN, which protects against skimming and lost and stolen card frauds. Based
on international experience, EMV chip card and PIN migration typically takes
more than five years, depending on the market size.

According to a report by a "Working Group on Securing Card Present

Transactions" of the Reserve Bank of India (RBI), there is a need to put in place
a series of measures to strengthen the payments infrastructure and ecosystem in
the country. Inferences drawn from case studies clearly indicate the need to have
a much stronger authentication mechanism and reiterate the need for a second
factor (2FA) for card present transactions. "In the absence of 2FA for POS
transactions there is a possibility of the fraud losses increasing by more than
200% in a single year, in the event of a sharp increase in fraud incidents in the
country. There is also a possibility of POS FTS (fraud-to-sales ratio) increasing
by around 200 basis points in one year under adverse conditions," the report
said. The report discusses new systems like EMV chip cards with PIN that has
been adopted by many countries and enhancing the current MSD card system
with help from biometric identification. "Aadhaar (issued by the Unique
Identification Authority of India - UIDAI) authentication using biometrics, provides
a strong 'Who you are' factor of authentication. This can be combined with a
second 'What you have' or 'What you know' factor to achieve strong customer
identification at the point of sale. While the option to use biometrics from the
UIDAI database looks good, in practice, due to insufficient feasibility tests, it may
not be a viable option. "The working committee considered biometric, or UID, as
the second factor in one of the solution sets; however, the decision to adopt this
would depend on various factors like the number of UIDs issued to the population
which transacts through cards, the error rates, authentication network capability
to handle transaction volumes, network capability to handle enhanced
transaction size and acquiring infrastructure," the report said. Therefore, while on
paper the use of biometrics as 2FA may sound feasible, its uses would be limited
at specific locations. In this situation, EMV chip cards and PIN look like the future
proof system, despite the higher costs, for card-based transactions.
Nevertheless, this may not be the last in payment transaction systems.

According to Bhavin Mody, senior product manager, ElectraCard Services, EMV

chip and PIN cards require the industry to make a huge investment in the card
issuing and acquiring infrastructure. In addition, it involves replacing all the MSD
cards that have been issued, which in itself could be a huge exercise. "EMV chip
and PIN is surely a long-term solution, but it would require a very long time (3-5
years) to implement. One more advantage, which EMV chip cards have, is that
this solution is extendible to offline modes of payments. This would enable mass
transit payments and payments requiring fast-moving queues. he said. One of
the options available for payment ecosystem players to consider is contactless
smart cards. Transit payments, like metro rail, buses, toll and loyalty applications
and microtransactions might accelerate the move to contactless cards in India.
Contactless transactions are known to be significantly faster and more efficient
than magnetic stripe or contact cards. Last month, internet search giant Google
launched 'Google Wallet', which allows people with compatible mobile phones to
pay for goods and services in shops by just waving their phones. Google Wallet
is based on near field communication (NFC) protocol.

According to Juniper Research, by 2013, one in five smart phones in the world
would have NFC capability. NFC is also available as a Micro SD card or sticker.
Such technologies will be a huge advantage in India, which has 24 crore debit
and credit cards and 58.1 crore GSM mobile subscribers, as of April 2011. In
November last year, the National Payments Corporation of India (NPCI) launched
its much awaited interbank mobile payment service (IMPS), which has the
potential to change the payments scenario in the country. According to bankers,
this system could revolutionize the retail payments process and even overtake
the number of payment transactions carried out through cards and the internet.
However, while there are nearly 60 crore mobile phone subscribers, there are
less than 20 crore 'active' bank accounts. Although on record there are about 31
crore savings bank accounts, many of them are either multiple accounts or they
are not operational. IMPS could help revive these accounts. Unfortunately, the
initial response for IMPS from lenders and customers has been lukewarm. In the
absence of information and awareness campaigns from the lenders to the end
user, the IMPS may not take off, as per expectation. Moneylife has been trying to
get access and use IMPS for subscription services since December last year,
without any luck so far. The reason is no one from our bank or branch seems to
have complete knowledge about IMPS. In the end, there is not a single payment
transaction system that we can label as future proof. While the EMV chip card
and PIN provide good options for safe and secure card payments, other systems
which use mobile phone may turn out to be the dark horse.
Present Credit Cards Scenario

According to recent research it was revealed that Consumers spent 1.9 trillion
in FY15.

Card spends grew 28% year-on-year (y-o-y), up from 24% last year, stated a
recent report by Worldline, an electronic payment services company. Consumers
spent Rs.1.9 trillion through credit cards and Rs.1.2 trillion through debit cards.
The report, India Card Payments Report for 2014-15, shows other such trends
seen in the past year in the use of credit and debit cards across channels like
ATM and point of sale (PoS) terminals. Here is a look at some of these trends
seen in the financial year (FY) 2014-15.
Growth in base

Credit card base grew 9.8% in the past year. Alternative methods such as mobile
wallets and prepaid cash cards accounted for 3% of digital transactions.
Whereas the debit card base grew 40% in FY15. However, PoS terminals saw a
modest rise in number. On a y-o-y basis, the increase in the number of PoS
terminals has been just 6%.
Number of transactions

Debit card transactions have grown by 36.5% CAGR (compounded annual

growth rate) over the past five years, while credit card transactions have grown
21%. Debit cards have seen a 30% growth y-o-y, and credit cards 23%. Debit
card transactions account for 57% of total card transactions at PoS terminals.
Total expenditure

The average ticket size for credit card transactions wasRs.3,089, up by 4.2%,
while for debit card transactions it wasRs.1,502, the same level as FY14. Spends
by debit cards have grown at a 5-year CAGR of 25%, faster than credit card
spends, which grew by 20%.
What was purchased

At PoS terminals, the retail sector is where consumers made the most card
purchases this year. Expenditure on fashion, including apparel and lifestyle
prodcuts, is 22%, down from 30% last year. With offers and co-branded cards,
consumption across fuel and travel, as well as in other sectors, is also
increasing.
Credit Cards Swipes Showing Rise

Spending with credit cards is on the rise in the country where consumers usually
prefer debit cards.

Outstanding on cards have risen nearly 23 per cent to Rs 32,900 crore in June
2015 from Rs 26,800 crore a year ago, according to the RBI.

However, this is lower than the 26 per cent growth seen nearly three years ago.

The rise in credit card use comes with a nearly 10 per cent growth in users in
2014-15 after a decline in the preceding year as unprofitable cards were
deactivated from circulation.

According to India Card Payments Report 2014-15 by Worldline India Pvt Ltd, the
credit card base in India stood at 21.1 million in 2014-15 against 19.2 million a
year ago.

"The credit card industry sees greater acceptance among customers. This is
seen from the fact that in spite of inactive credit cards being weeded out of the
system, credit card numbers have grown,'' the report said.
The report says private banks continue to be the major issuers of cards with a
share of 57 per cent in 2014-15. Their aggressive strategy has lowered the share
of foreign banks to 22 per cent from 26 per cent in the previous year. The share
of nationalised banks stands at 20 per cent.

Industry circles do not rule out the possibility of the share of PSU banks inching
up,as players such as the State Bank of India have recently turned aggressive in
this segment.

According to the report, the market share of the SBI, the country's largest bank,
stood at 15 per cent against 16 per cent of ICICI Bank. The latter, the report
claimed, had seen a 1 per cent drop in its market share during the year.

However, ICICI Bank, which has been focusing on secured loans in its retail
portfolio, has recently seen a strong growth in its credit card segment.

For the June quarter, credit cards accounted for nearly Rs 4,102 crore of its total
retail loan book of Rs 1,70,900 crore compared with Rs 3,293 crore in June last
year.

Transactions through debit and credit cards have grown 30 per cent and 23 per
cent, respectively.
The report said debit card transactions accounted for 57 per cent of the total card
transactions at points of sale terminals.

Debit cards are higher in circulation as they are issued on opening a bank
account. While these cards are largely used for small-ticket transactions, credit
cards are used for big purchases.
Consumer Perception Towards Credit Card

Intangibility is the inherent nature of services. Service is a "performance" rather

than a "thing". There are more of experience and credence qualities with services
than search qualities. Therefore, consumers perceive high degree of uncertainty
in making a service purchase decision due to lack of tangible cues with service
product. As a result, consumers normally do not consider service product
features to evaluate service offer.

Present study has its focus on understanding how consumers' perceive and
consider service product features for making purchase of credit cards. Objectives
are to analyze the role of service product features (core benefit, facilitating
services and supplementary services) in pre-purchase evaluation and to
understand the position of supplementary services at product levels. The data
analysis indicates that consumers consider service product features during pre-
purchase evaluation of credit cards and respondents find it easy to make a
purchase decision on the basis of supplementary services.

Responses reveal that existing supplementary service elements are perceived

more of expected features than augmented features of credit cards. Services
marketing differ from goods marketing due to well established service
characteristics; viz., intangibility, perishability, inseparability of production and
consumption, heterogeneity and lack of ownership. Further, this difference is due
to resulting extended marketing-mix of 7Ps (Booms and Bitner, 1981). The
present study is focused on the fundamental 'P'; i.e., service product which is
critical to manage for keeping one's business in market.

The service product is essentially a bundle of activities, consisting of a core

service plus a cluster of supplementary services. The core elements respond to
the customer's need for a basic benefit; for example, airlines offer transportation.
Supplementary services are those that add value to the core service. Within the
purview of given parameters, the study is carried out in the area of financial
services marketing, a branch of services marketing, with special reference to
credit card services.

Thus, the objective is to study the consumer perception towards service product
features.

With the new reforms in the banking sector, the marketing of financial products
has become very competitive, creating a need for strategizing the marketing
efforts. This study investigates the shift of consumers towards the use of plastic
money, with emphasis on credit cards. A survey of consumers holding (at least)
one or no credit card were used for data collection. Variables related to
demographics such as age, income level and gender have also been taken into
consideration. This study makes (the) use of descriptive variables in terms of
analyzing the general attitude about the use of credit cards and the factors
contributing towards the selection of (a) one particular credit card over the other.

A positive relationship has been found between the income level of a person and
his/her possession of the credit card. While making the choice of a credit card the
trust in a particular brand name seems to hold a very significant importance in
the selection of a credit card, instead of the logo of Visa or Master card.

The profession of the person seems to play a very interesting role with their
behavior towards credit cards. Our study shows that the bankers hold negative
attitude towards the use of a credit card. The moderating variables include the
marketing campaign of a particular bank, sales teams support, openness from
retailers for accepting credit card instead of cash, knowledge about the true
interest rate imposed by the banks and the concept of financing, etc.

Based on an observations, suggestions have also been made for managers to

refine the target market. The popularity of credit cards as a payment medium has
been attributed to the convenience of not carrying cash and checks, the limited
liability of lost/ stolen cards, and additional enhancements, such as dispute
resolution services and perks (i.e., frequent-use awards programs)
They are frequently used for convenience, telephone and Internet transactions.
The behavior and the attitude of the consumer towards the use and acceptability
of credit cards differ for psychographic reasons devised a 38-item scale to
measure affectiveness, cognitive and behavioral attitudes towards credit cards.

Affective attitudes involve emotional feelings (e.g. My credit card makes me feel
happy); cognitive attitudes involve thoughts (e.g. Heavy use of credit cards
results in heavy debt); while behavioral attitudes involve actions (e.g. I use my
credit card frequently). Many consumers value uncollateralized credit lines for
making purchases when they are illiquid (i.e. before their incomes arrive), even at
relatively high interest rates.

Because of limited alternatives to short-term uncollateralized credit, the demand

for such credit may be fairly in-elastic with respect to price consumers may not
even consider the interest rate when making purchases because they do not
intend to borrow for an extended period when they make purchases.

However, they may change their minds when the bill arrives. the consumers are
somewhat sensitive not only to changes in the interest rate but also to the value
of other credit-card enhancements such as frequent-use awards, expedited
dispute resolution, extended warranties, and automobile rental insurance.
However, she agrees that lowering interest rates may attract less creditworthy
consumers, therefore dissuading some credit-card issuers from lowering their
interest rates. longitudinal study, low income users of credit cards tend to use the
cards for the installment feature rather than for service features such as
convenience, safety, or identification.

It has been suggested that the installment feature of credit is needed by the low
income consumer to permit purchases such as automobiles, furnishings, and
other consumer durables.

Demographics also seem to play a vital role in making a choice and the use of
credit cards as a convenience user or revolver. Age, income level has been
studied previously and suggest some indication for correlation between
demographic and use of credit card.

According to the study conducted the probability of having credit cards and the
number held was correlated highly with age and occupation. However these two
characteristics were less important than the place of residence, use of checking
and savings accounts, and attitude towards credit. consumers, those who have
credit card, prefer to use cash mostly in book stores, grocery stores, and night
clubs credit card is mostly preferred for the payments of clothing, gasoline, and
supermarket.

On the other hand, consumers prefer to use other forms of payment such as
installment, bank credit while they are making shopping in electronics and
furniture stores. The results indicated that customer characteristics affecting
credit card choice criteria included age, marital status, education, and income
level
CONSUMER AWARENESS

Anyone who consumes goods is a consumer. Consumers get exploited in the

market. They respond to advertisements and buy goods. Generally
advertisements do not give all the information that a consumer needs to know or
wants to know about a product.

There are 22.5 crore debit cards in the country and while nine of ten transactions
are done at the ATMs, only one transaction is done directly at the merchant
establishment. Now, priority is to make consumers aware of the electronic
payment scheme. Uttam Nayak, group country manager (India & South Asia) at
Visa, tells FE's Kumud Das that channels like internet and mobile will help
accelerate cashless payments in the country.

How do you see the electronic payments industry in India?

The opportunity in India for electronic payments is huge. First, if you look at
India's personal consumer expenditure (PCE), or the amount spent on a card on
an average, it is only 3% compared to the global average of 16%.

New channels like internet and mobile will help accelerate cashless payments
and electronic mode of disbursement will be key to ensure the right person
receives the right amount.

Do you think the overall picture is changing on how payments are made?

In the mid-90's, only foreign banks like Citibank and Standard Chartered were
issuing cards and had set up ATMs for cash withdrawals and point of sales (PoS)
terminals at merchant establishments. Today, we have almost 50 banks that
issue credit or debit cards and have set up large ATMs and PoS networks.
 Additionally, we are seeing the acceptance network also grow because
merchants are realising that the cost of processing cash is very high and that
consumers benefit from the convenience of cashless payments.Globally,
transactions worth more than $100 billion take place through cards every year. In
India, there has been an increase in online transactions which is a result of RBI's
security mandate of second factor authentication. In future, we will definitely see
cardholders move to newer e-payment modes such as mobile payments.

Although there have been a number of changes in the industry, we believe the
Indian market will see continued innovation and growth in electronic payments.

How do you differentiate between PoS and ATM usage?

Point of sale (PoS) is when a cardholder uses his card to purchase his groceries,
pay bills at the restaurant or buy movie tickets. ATM usage is when a cardholder
withdraws money in cash.

Even though there are over 70,000 ATMs against 5 lakh PoS terminals in the
country, we see cardholders going to ATMs more often. There are 22.5 crore
debit cards in the country and nine of ten transactions are conducted at the ATMs
while only one of the ten transactions is done directly at the merchant
establishment. All key stakeholders recognise that consumer awareness on
electronic payments is a priority.

National Payments Corporation of India has also joined the space and it is trying
to come up with its own card, to be known as RuPay? How will it change the
dynamics?

As mentioned earlier, PCE penetration in India is only around 3%. The Indian
market requires significant investments for developing world class inter-operable
payments infrastructure. There is an opportunity of increasing PCE penetration
drastically and we believe this will happen once more participants come into the
industry to achieve faster growth.

What are the most popular uses of cards in India?

Electronic payments bind key industries together and enables them to provide
value for money to their customers. To start with, we have large retail stores
which accept and promote payments through credit/debit cards. As far as the
aviation industry is concerned, it benefits by gaining popularity by offering their
customers low fares through e-ticketing. There are 22.5 crore customers availing
electronic payment, out of which 5.5 crore customers are availing the facility to
buy online air tickets only.

We also have almost all important insurance companies in India accepting

premium payments online. Debit card market is growing faster compared to that
of credit cards as per the data provided in the RBI website. How do you see it?

For every credit card, there are 10 debit cards in the country. However, the key
challenge is that the usage of credit/debit cards at PoS is very low and PoS
transactions are yet to pick up.

Visa is working with banks to educate cardholders on the advantages of

electronic payments. Visa, together with its partner banks, regularly run a number
of campaigns to create awareness among the cardholders. The most recent
campaign was the cashback programme for cardholders.

Can you throw some light on Visa Bill Pay. In order to provide convenience to
cardholders, one of Visa's key initiatives is Visa Bill Pay, - a portal which provides
a simple, convenient, secure and reliable way to pay bills with a Visa card.
 CHAPTER II- OBJECTIVES

The objectives of the study are:

To study the awareness of bank customers about credit cards.

To examine the extent of usage of credit cards by card holders.
To find out the attitude of card holders towards credit cards.
To offer suggestions for further improvement.
 CHAPTER III- RESEARCH METHODOLOGY

Research in a layman language means a search for acknowledges. One can also
define research as a scientific and systematic search for potential information on
a specific topic. Infect research is an art of scientific investigation. The dictionary
meaning of research is a careful investigation or inquiry especially through
search for new facts in any branch defines research as a systematized effort to
gain new knowledge. Some people consider research as a movement from
known to unknown.

Research is an academic activity and as such the term must be used in a

technical sense. Research is an original contribution to the existing stock of the
knowledge making for its advancement. It is pursuit of truth with the help of study,
observation, and experiment. The purpose of research is to discover answers to
questions through the application of systematic procedure.

2. RESEARCH DESIGN:

The research problem have been formulated in clear cut terms, the researcher
will be required to prepare a research design, i.e., he will have to state the
conceptual structure with in which research would conducted. The preparations
of such a design facilitate research to be as efficient as possible yielding maximal
information. Research design may be grouped in four categories, viz.

a). Exploration

b). Description

c). Diagnosis

d). Experimentation
3. SAMPLE: -

50 Respondents

SAMPLE SIZE: -

50 Respondents

The Research Instrument used in this project is Observation Method.

COLLECTION OF DATA:-

The task of data collection begins after a research problem has been defined and
research design/plan chalked out. The collection of data is done to support tour
findings and interest the result whether the result you have found in according to
your hypothesis or not. The data can be collected by various methods. These are
broadly classified into two ways, as follows:

PRIMARY DATA
SECONDARY DATA

PRIMARY DATA:-

The primary data are those which are collected a fresh and for the first time and
thus happen to be original in character. We collect primary data during the course
of doing experiments in an experimental research. It is the first hand data and
nobody else has collected this before. There are various ways of collecting
primary data, these are as follows:

1). Observation method

2). Interview method

3). Questionnaires
4). Schedules

5). Other methods

SECONDARY DATA:

1. Internet
2. Journals and Magazines
3. Websites

RESEARCH METHODOLOGY USED IN PROJECT

RESEARCH USED

The type of research used in this project work is Descriptive. The

Descriptive research is used to collect Data and find out the cause and effect
relationship.

TYPE OF DATA COLLECTION METHOD

Data Collection Method used in this project is:

Primary data

a. Interview

b. Observation

c. Questionnaires

Secondary Data

a) Published Sources
b) Unpublished Sources.
c) Websites

DESCRIPTIVE RESEARCH
Descriptive Research studies are those studies, which are concerned with
describing the characteristics of a particular individual or a group. A descriptive
research require a clear specification of what, who, when, where why and how
aspects of the research.

OBSERVATION METHOD

The observation method is most commonly used method especially in the studies
relating to behavioral sciences. The main advantage of this method is that
subjective bias is eliminated, if observation is done accurately.

Secondly, the information obtained under this method relates to what is currently
happening; It is not complicated by either the past behavior or future intentions or
attitudes. Observation methods are of various types like structured, unstructured,
controlled and uncontrolled.

Limitations of Study

People were not ready to fill in the questionnaire

Many of the surveyed people did not reply all the questions.

The time period given for study was very limited.

The sample size was very small which is may not represent the entire
population.
 CHAPTER IV- ANALYSIS AND FINDINGS
After the collection of data, it is being analyzed. The responses given by
employees are analyzed in order to present it into meaningful form. Various scales
and graphical representations are being used to present information clearly.

1. Occupation of respondents

NO. OF
Occupation
RESPONDENTS

Self Employed 10

Private Sector 20

Professional 15

Govt. Sector 5

TOTAL 50

INTERPRETATION

From the above analysis we can know that 39% of the respondents were from
Private Sector, 29% were Professionals, 20% were Self Employed and 12% were
from Government Sector. It shows that people working in Private Sector are main
target audience of the credit card companies.
2. Gender of respondents

NO. OF
OPINION
RESPONDENTS

Female 16

Male 34

50

Gender
40

35

30

25
Gender
20

15

10

0
Male Female

INTERPRETATION

The above analysis shows that 68% of the respondents were Male while 32%
were female.
3. Which credit card do you use?

TYPE OF CREDIT NO. OF

CARD RESPONDENTS

Visa 15

Mastercard 20

Gold 10

Platinum 5

TOTAL 50

CREDIT CARD
25

20

15 CREDIT CARD

10

0
VISA MASTERCARD GOLD PLATINUM

INTERPRETATION
From the analysis it is clear that 40 % of people use Master Card followed by
30% who use Visa, 20% use Gold and 10% use Platinum Card.
4. How would you know about Credit cards?

NO. OF
OPTION
RESPONDENTS

Advertisements 27

Friends and
5
Relatives

Direct Selling
18
Agents

TOTAL 50

How would you know about Credit Cards ?

30

25

20

15
How would you know about
10 Credit Cards ?
5

INTERPRETATION:
From the above table, it is clear that 54% of the respondents know about credit
cards through advertisements. 10% of the respondents know about credit cards
through friends and relatives. 36% of the respondents know about credit cards
through direct selling agents.

5. According to you which are the convenient way to pay?

NO. OF
OPTION
RESPONDENTS

Cash 17

Credit card 20

Both 13

TOTAL 50

According to you which are the convenient way to pay?

25

20

According to you which

15 are the convenient way to
pay?
10

0
Cash Credit Card Both

INTERPRETATION:
From the above table, it is clear that 34% of the respondents agreed that cash is
the convenient way to pay. 40% of the respondents agreed that credit card is the
convenient way to pay. 26% of the respondents agreed that both the ways are
convenient to pay.
6. What prompts you to use credit card instead of using cash?

NO. OF
OPTION
RESPONDENTS

Convenience 15

Free credit
availability 10

Cash handling not

required 6

Status symbol 12

Emergency 7

TOTAL 50

What prompts you to use credit card instead of using cash?

16
14
12
10
8
6
What prompts you to use
4
2 credit card instead of using
0 cash?

INTERPRETATION:
From the above table, it is clear that 30% of the respondents agreed that they
use credit cards for convenience. 20% of the respondents agreed that they use
credit cards for free credit availability. 12% of the respondents agreed that they
use credit cards for no use of cash handling. 24% of the respondents agreed that

they use credit cards as status symbol. 14% of the respondents agreed that they
use credit cards for emergency.

7. Has credit card brought any changes in your monthly spending?

NO. OF
OPINION
RESPONDENTS

Yes 36

No 14

TOTAL 50

Change in Monthly Spending

NO; 28%

YES; 72%
INTERPRETATION:

From the above table, it is clear that 72% of the respondents said that credit card
brought changes in their monthly spending. 28% of the respondents said no.

8. Which factor influenced you most to buy credit card?

NO. OF
OPINION
RESPONDENTS

Price 8

Presentation of
16
sales man

Cash withdrawal 16

others 10

TOTAL 50
Factors which Influenced You to Buy Credit Card
18
16
14
12
10
8
6
4 Factors which Influenced
2 You to Buy Credit Card
0

INTERPRETATION:

From the above table, it is clear that 12% of the respondents are influenced by
price. 24% of the respondents are influenced by presentation of salesman. 18%
of the respondents are influenced by insurance cover. 38% of the respondents
are influenced by cash withdrawal. 8% of the respondents are influenced by
others.

9. Indicate Your assessment towards the following :-

Note :-
1) Strongly Agree
2) Agree
3) Neither Agree Nor Disagree
4) Disagree
5) Strongly Disagree

S.No Statements 1 2 3 4 5
Credit Card allows purchase before funds are
1 available.
 Interest rates charged on credit card are
2 reasonable.

3 Credit cards are used anytime at most places.

Added benefits in the form of discount make
4 the purchase decision on credit card easier.

5 There is regular delivery of bill statement.

 1. Credit cards allows purchase before funds are available

Rating 1 2 3 4 5
Respondent 25 25 0 0 0

Average Score of Respondent = 1*25+2*25+3*0+4*0+5*0= 75/50=1.5

Credit Cards Allows Purchase before Funds are available

30

25

20

Credit Cards Allows Purchase before Funds are available

RESPONDENTS 15

10

0
1 2 3 4 5

RATINGS

INTERPRETATION

It can be clearly seen from the analysis done that most of the Respondents either
very strongly agree or simply agree that Credit Cards Allows Purchase before
funds are available
 2. Interest rates charged on credit card are reasonable.

Rating 1 2 3 4 5
Respondent 10 15 20 3 2

Average Score of Respondents =1*10+2*15+3*20+4*3+5*2= 122/50= 2.44

Interest rates charged on credit card are reasonable.

35

30

25 Interest Rates Charged on

Credit Cards are
20 Reasonable
RESPONDENTS
15

10

0
1 2 3 4

RATING

INTERPRETATION

Majority of the respondents neither agreed nor disagreed when asked if they felt
that the interest rate on credit cards was reasonable.
 3. Credit cards are used anytime at most places.

Rating 1 2 3 4 5
Respondent 20 25 5 0 0

Average Score of Respondents =1*20+2*25+3*5+4*0+5*0=85/50=1.7

Credit Cards are Used Anytime at Most Places

30

25

20

Credit Cards are Used

RESPONDENTS 15 Anytime at Most Places

10

0
1 2 3 4 5

RATING

INTERPRETATION

It is clearly shown from the analysis that most respondents feel that Credits
Cards can be used anytime and at most of the places.
4. Added benefits in the form of discount make the purchase decision
on credit card easier.

Rating 1 2 3 4 5
Respondent 10 20 20 0 0

Average Score of Respondents= 1*10+2*20+3*20+4*0+5*0= 110/50=2.2

Added benefits in the form of discount make the purchase decision on credit card easier
25

20

15 Added benefits in the form

of discount make the
Respondents purchase decision on credit
10 card easier

0
1 2 3 4 5

Rating

INTERPRETATION

The respondents had a mixed response, some felt like discount benefits acts
as an added advantage while purchasing decision on credit card while some
responded in neutral.
5. There is regular delivery of bill statement.

Rating 1 2 3 4 5
Respondent 15 25 5 5 0

Average Score of Respondents = 1*15+2*25+3*5+4*5+5*0= 100/50=2

There is regular delivery of bill statement.

30

25

20
There is regular delivery
Respondents 15
of bill statement.

10

0
1 2 3 4 5

Rating

INTERPRETATION

As per the analysis, it was observed that most of the respondents knew that
there is regular delivery of bill statement of credit cards, however some were
uninformed.
 Limitations of Study

People were not ready to fill in the questionnaire

Many of the surveyed people did not reply all the questions.

The time period given for study was very limited.

The sample size was very small which is may not represent the entire
population.
 Recommendations and Conclusions

RECOMMENDATIONS

With the multiplying volumes and the contest for efficiency, marketers vie with
each other out to the existing and potential card holders. A shakeout is
inevitable in this field of marketing. The card issuers face many difficulties and
the credit card service market also suffers from certain bottle necks which can
be outlined below.

1. The banks must reduce the service charge which is to be paid by the
card holders for ticket booking, petrol fills and certain establishments
that charge 2 to 3% on the total price.
2. Women should be induced to use credit cards by creating awareness
on the benefits derived from them. New schemes should be introduced
to cater to their specific needs.
3. The methods should be adopted to bring degree of popularization
through mass media channels like Television, Radio, Airports Centres,
Star Hotels, Railway Centres, and Super Markets etc.
4. Customer education is needed for increased awareness, facility
derived and ways to make the best use of the card.
5. The credit card holder should sincerely and honestly repay the
balances in time and facilitate the system to work out smoothly.
6. The credit cardholders should plan their economic affairs i.e. they
should not buy unnecessary or unwanted things simply because they
have credits which does not require immediate payment. They should
always think about the future commitments and arrange funds for in
time.
7. The Admission fees and renewal fees should be reduced so that it can
attract more customers.
8. The interest charged by the credit card agencies is much higher than
the normal lending rates by the bankers and it should be reduced.
 CONCLUSIONS

1. Majority of the respondents are male working in private sector.

2. Customers know about the credit cards maximum through advertisements.
3. Customers feel that credit card is the convenient way to pay.
4. Customers are satisfied with their existing credit cards.
5. Customers are influenced by cash withdrawal facility of credit cards.
6. Services provided by credit card(s) are according to the customers
expectations.
7. Respondents with higher salary utilize the cards to the maximum whereas
those with lower salary are more cautious.
8. Lower the savings, higher is the requirement for the use of cards.
Purchases can be made through cards and can be paid from next months
salary because the limit is 45 days for settling the dues.
9. Credit cardholders with higher income feel that credit cards have changed
their consumption pattern. The credit card purchase is not always a
rational buy; some part of it is also impulse buying.
 APPENDICES

Questionnaire Mailed to Respondents

1. What is your occupation?

(a) Self Employed
(b) Private Sector
(c) Professional
(d) Government Sector

2. What is your Gender?

(a) Male
(b) Female

3. Which Credit Card do you use ?

(a) Visa
(b) Master card
(c) Gold
(d) Platinum

4. How would you know about Credit Cards?

(a) Advertisements
(b) Friends and Relatives
(c) Direct Selling Agents\

5. According to you what are the convenient ways to pay?

(a) Cash
(b) Credit Card
(c) Both
 6. What prompts you to use Credit Card instead of cash?
(a) Convenience
(b) Free Credit Availability
(c) Cash handling not required
(d) Status Symbol
(e) Emergency

7. Has credit card bought any changes in your monthly savings ?

(a) Yes
(b) No

8. Which factor influenced you the most to buy credit card?

(a) Price
(b) Presentation of salesman
(c) Cash withdrawal
(d) Others
9. Indicate Your assessment towards the following :-
Note :-
6) Strongly Agree
7) Agree
8) Neither Agree Nor Disagree
9) Disagree
10)Strongly Disagree

S.No Statements 1 2 3 4 5
Credit Card allows purchase before funds are
1 available.
Interest rates charged on credit card are
2 reasonable.

3 Credit cards are used anytime at most places.

Added benefits in the form of discount make
4 the purchase decision on credit card easier.

5 There is regular delivery of bill statement.

 BIBLIOGRAPHY

Books

Consumer Attitudes Toward Credit Insurance- By John M. Barron, Michael

E. Staten

How Credit Cards Work- By Gillian Houghton

First Credit Cards and Credit Smart- Ann Byers

Articles and Journals

http://www.livemint.com/Money/JjiJ1MstQRcjwU2fubyMTO/Credit-card-
spends-total-19-trillion-in-FY15.html

http://www.telegraphindia.com/1150817/jsp/business/story_37524.jsp#.Vu
LyPH195dg

http://iosrjournals.org/iosr-jbm/papers/vol2-issue3/C0231423.pdf

http://www.researchmanuscripts.com/September2013/3.pdf