This festive season, banks and financial institutions have a reason to be worried as many Indians opted to pay for their festive shopping by means of Credit Cards. The number of transactions by means of plastic money went up by 20% this festive season in absence of other financing modes like persona loans or white goods consumer loans provided by Citi / GE Money.
R.L.Prasad of Standard Chartered said,
Cards usage typically grows during the festive season starting from September. It is important to constantly monitor spends and take appropriate action to prevent defaults.
ICICI Bank the largest issuer of credit cards said that it was not worried since it was catering to existing customers with good credit history. What a Joke ?
Rising interest rates and double digit inflation has left lower disposable income in the hands of Indian consumer which has made them to go the Credit Card route. Also people wouldn’t want to part with their cash reserve nest in uncertain times.
Future Group [Pantaloon, Central Mall, Big Bazaar etc] and Spencers retail have confirmed the higher usage of plastic money at their stores during this festive season.