The severe cold calls by banks to customers for pushing credit cards , it always seemed evident to analysts that the market for credit card would continue to grow in India.
But recent data released by Reserve Bank of India says a different story altogether. The data shows that the usage of credit cards has shown a decline in the country.
Moreover, the usage of credit card is not only declining but plastic money is also underutilized in India.
" Debit cards have had a slow start and their growth only took off in the last three years. On the other hand, credit cards grew faster since inception, with the growth turning negative in the latest year," noted IIT- Bombay faculty Ashish Das, who authored a paper 'Cashless payment system in India A roadmap'.
From the year 2005 to 2008, there was a surge in the credit card business in India. The credit card market was found to grow by more than a crore in the three year span.
But things changed after the global economy was hit by the financial crisis.
"We have seen several customers surrender their credit cards. Increasingly, debit cards are gaining popularity. While the total business transacted by credit cards fell by 10% across India, the total amount of transaction with debit cards increased from Rs 18,547 crore to Rs 26,417 crore," said a senior manager from HDFC bank.