The credit card that has been one of the sectors hit hard by the global financial crisis witnessed nearly half of credit and debit cards in the country as inactive.

This is likely to be a result of inadequate funds in the bank accounts of the people who are not able to afford all their cards simultaneously.

A report of the study done by Dunn & Company (EDC) and India Cards Council (ICC) stated that there were only 56% active debit cards in India against 90% active cards UK and Australia.

"There is a very low level of debit card usage at POS (Point of Sale) compared to other countries. For example: 26 percent of active debit cards used at POS versus 86 percent in the US and 45 percent in Australia," revealed the study.

Further the study added that, "The very low costs associated with new cardholder acquisition may indicate that insufficient resources are being applied to checking credit worthiness of applicants."

EDC said that India has only had inactive debit cards but even the credit card segment has had only 56% active cards as compared to 80% and 75% active credit cards in Australia and Singapore respectively. In fact the card issuers had also been blocking the inactive cards in order to reduce their billing and mailing costs.

The credit loss in the segment has also been high as compared to international standards because of the low level of both transaction volume and transaction value across the card base, said EDC.