If youa are a resident in one of the smaller cities in India, then chances are high that your application for credit card will be turned down unless you are in a safe and secured salaried job. Increasing pressure on Direct sales Associates in the past 3 quarters has led to increase credit card penetration in wrong hands thus leading to higher delinquent accounts and higher outstanding balances on credit cards.
The amount outstanding on Credit Cards by Indians is up a whopping 87% between Jan-May,2008. The figure now stands at Rs 26,590 crore compared to Rs 12,375 in the year ago period.
In an instance discovered by the banks, some credit card holders shook hands with bank’s recovery agents. The modus operandi was, the customer exhausted his limit on the credit card and parted with some amount with the bank’s recovery agent. The recovery agent closed the case as no breakthrough.
Bank’s eager to grow credit card business are now taking cautious approaches. However, I still don’t agree with them increasing APR rates and levying hidden fees. [For instance, HDFC Bank has quietly raised the FEES on cash payment of credit card dues from Rs 50 / cash payment to Rs 100 / cash payment + Taxes]