The credit cards debt in the country has been increasing following the economic slowdown that has taken its toll over the nation. The Indian consumers that have been rapidly using credit cards for their transactions are seen to delay on their repayment.

These swelling debts on credit cards are compelling banks and credit card issuers to take preventive measures. As a result most banks have cut down on their credit card business by reducing the cash withdrawals, credit limits and halting on new issue.

The latest RBI data claim that the credit card dues have been mounting up by 73% to Rs 29,359 crore at the end of December 2008 from Rs 16,951 crore recorded at the end of November 2007.

A UCO Bank official said, "The sudden surge in credit card dues and advances against fixed deposits is because people, squeezed by higher interest and inflation rates for most part of the year (2008), have resorted to more borrowing to meet their expenses."

Major credit card issuers like ICICI Bank has been going slow in its credit card book that has been reduced to Rs 7,800 crore during April-December 2008 from Rs 8,100 crore in the first nine months of the previous fiscal. ICICI Bank is the largest card issuer with 18 million customers.

ICICI has witnessed increased amount of outstanding advances under the credit cards segment ever since the meltdown became aggressive and therefore to check the default rate, it has been slowing down on the credit card business. Chief Executive Officer and Managing Director of the bank, Chanda Kochar said the loss ratio on its credit card business has reached double digits in this year. “The increase in loss rates is here to stay,” she said

She however noted that, "Individuals prioritize their repayment commitment during an economic downturn and paying credit card bill is last in the priority."

The credit limit on ICICI cards in January has been revised to 1.5-2 times of monthly income from 2-3 times, informed an official from the bank. "This measure aims at arresting the increasing delinquencies in credit card payments," added the official.

ICICI has also withdrawn the Xpress Rewards Programme.

Given these situations all the banks are rushing to prevent the risk associated with credit cards.