Decline in credit card nos persists

The number of credit cards around has been steadily falling since the start of the current financial year. The latest Reserve Bank of India (RBI) data showed the number outstanding was 18.1 million in the month of December 2010 from 19.3 million in April 2010. In November, it was 18.2 million. Over a year, the number has shrunk by 12.3 per cent.

“After their experience during the recession, banks are still cautious over issuing credit cards,” said a public sector banker. Banks had, after the recession hit, begun blocking outflow of credit towards personal loans on concerns of defaults. Credit cards are treated as personal loans, as they are unsecured and funds are used for incurring personal expenses.

“Banks are still selling credit cards to existing customers only,” said Lalit Sinha, general manager, alternate channels, Union Bank of India. On the other hand, debit cards are becoming more popular by the day. After the first nine months of 2010-11, the number outstanding of these reached 216 million from 185 million in April 2010. The rise over a year in debit cards has been 27 per cent.

Credit card payments made at point-of-sales terminals rose 25 per cent in the first nine months of 2010-11.