Credit Card

MEANING :

Any card, plate or coupon book that may
be used to borrow the money or buy product and service
on credit.

DEFINITION:

A credit card is part of a system of payments named after the small plastic card issued to
users of the system. It is a card entitling its holder to buy goods and services based on the
holders promise to pay for these goods and services. A credit card is different from a
charge card, where a charge card requires the balance to be paid in full each month.

Credit cards provide convenience and safety to the buying
process. It enables an individual to purchase certain products/services without paying
immediately. Credit card can, therefore, be considered as a good substitute for cash and
cheques.

What are Credit Cards and some details about them?

A credit card is a way of payment by using the plastic cards which are issued to
customers for their payment. Credit cards are different than the debit cards.

Credit card works differently from the debit card. It is issued after a credit
card application has been made to the issuer. The issuer then lends money to the credit
card holder generally on different rates of interest. And if a consumer is using credit cards
then it means he can reconcile his balance at the cost of charging interest and it would
make his payment period longer than before. Most credit cards are having almost the
same shape and size around the globe.

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Credit cards work in a very simple way, a consumer is issued a
credit card after his application for credit card has been approved by concerning
authorities and a credit company shows its consent to issue the applicant a credit card.
Now the customer who has purchased the credit card will be able to buy things on credit
up to the limit of credit which was agreed upon by both parties in terms and conditions.

A consumer can also used credit card online facilities to get benefit from his credit card.
This online credit card facility is easy to use and it is faster than the actual procedures of
cash transactions.

Every credit card is supported by a credit card companies. Some of credit cards
companies are best and they offer very user-friendly credit cards. This kind of credit card
is one of the best credit card and their characteristics have no comparison with any other
type of credit cards.

In these cards the widely known cards are Visa Credit Cards & Master Credit Cards
they are used all over the world. You can apply for credit card in any credit card
company, or in a bank or you can also apply online for getting a credit card.

Different credit card companies and credit banks also maintain a system of credit check
to get their credit in times. So a consumer will not be able to deceive them by using their
credit cards.

This credit check is maintained regularly and if a credit card holder is not able to pay his
payments in the assigned time of payment then he will be given a grace period and in a
case he would not be able to pay his credit. His credit card would be blocked. And he will
not be able to make any further purchases from his credit card.

The rewards and points which person gets from using a credit card can be emerged
together and that would the credit card consolidation.

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History of Credit card :

Selling goods on credit, relying upon the credibility of the
consumer has been the practice of the merchants from time immemorial. Such a system
helped both the consumer and the merchant. In this context, credit cards were introduced
as a viable means of selling goods on credit with an aim of expanding sales and building
a strong customer base.

The credit card was the successor of a variety of merchant credit schemes. It was first
used in the 1920s, in the United States, specifically to sell fuel to a growing number of
automobile owners. In 1938 several companies started to accept each other's cards.

The concept of using a card for purchases was invented in 1887 by Edward Bellamy and
described in his utopian novel Looking Backward. Bellamy uses the explicit term "Credit
Card" eleven times in his novel.

The concept of paying merchants using a card was invented in 1950 by Ralph Schneider
and Frank X. McNamara in order to consolidate multiple cards. The Diners Club, which
was created partially through a merger with Dine and Sign, produced the first "general
purpose" charge card, which is similar but required the entire bill to be paid with each
statement; it was followed shortly thereafter by American Express and Carte Blanche.
Western Union had begun issuing charge cards to its frequent customers in 1914.

Bank of America created the BankAmericard in 1958, a product
which eventually evolved into the Visa system ("Chargex" also became Visa).
MasterCard came to being in 1966 when a group of credit-issuing banks established
MasterCharge.

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The fractured nature of the US banking system meant that credit cards became an
effective way for those who were travelling around the country to move their credit to
places where they could not directly use their banking facilities. In 1966 Barclaycard in
the UK launched the first credit card outside of the US.

There are now countless variations on the basic concept of revolving credit for
individuals (as issued by banks and honored by a network of financial institutions),
including organization-branded credit cards, corporate-user credit cards, store cards and
so on.

In contrast, although having reached very high adoption levels in the US, Canada and the
UK, it is important to note that many cultures were much more cash-oriented in the latter
half of the twentieth century, or had developed alternative forms of cash-less payments,
like Carte bleue, or the EC-card (Germany, France, Switzerland, among many others).

In contrast, because of the legislative framework surrounding banking system overdrafts,
some countries, France in particular, were much faster to develop and adopt chip-based
credit cards which are now seen as major anti-fraud credit devices.

The design of the credit card itself has become a major selling point in recent years. The
value of the card to the issuer being related to the Customer's usage of the card. This has
led to the rise of Co-Brand and Affinity cards - where the card design is related to the
"affinity" (a university, for example) leading to higher card usage. In most cases a
percentage of the value of the card is returned to the affinity group.

Apnaloan.com' s credit cards section will give you tips on how to get your card, use your
credit cards wisely, what to do AND what not to do where you credit cards are
concerned.

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FEATURES OF MODERN CREDIT CARD

Any card that is used as a payment device to access a customer's
financial resources is referred to as a credit card.The card may be used during
travel,home,for purchases or at the Automated Teller Machines(ATMs) for credit or debit
transactions.

It is also known as "plastic money",and it can be used for the purchase of all
kinds of goods and services.

Following are the salient features of the modern credit card:

Fees and Charges

The saying "there's no such thing as a free lunch" is particularly true when it comes to
credit cards. So work out exactly what fees you're likely to be paying, and if it's possible
to avoid them. For example, you may avoid paying interest if you pay the balance off in
full each month.

Annual Fee

When the credit card companies realised that some people really could be disciplined and
pay off their balance each month, they discovered they didn't make any money. So in
came the annual fee - basically to make sure you pay them something for the use of their
card. The good news is that with the credit card market being so competitive, you can
often negotiate to have this fee removed.

Cash Advance Fee

Nearly every credit card company will charge you a cash advance fee. Be warned - some
of them charge some very hefty cash advance fees.

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Wide Usage:
bank credit is the most widely used payment device issued by banks.It is based on the
system of revolving credit whereby a credit limit is sanctioned to the customer and can be
availed in part or in full.Once the outstanding balance is paid,the credit limit is restored
for further use.The credit card holders can use the credit cards at merchant
locations to buy goods or services.Special credit cards can also be used to obtain cash
through ATM's.Going by their popularity all over the world,credit cards have been a
runaway sucess.

Owner Identification:

A credit card identifies its owner as the one who is entitled to purchase goods and
services without physical money and is eligible for credit from establishments.

Credit Limit:
The issuer, for the pupose of convenience and scrutiny,sets up a credit limit for its
cardholders and a floor limit for its merchants establishments.The convenience and safety
factors add value to these cards.

Technology Dependent:
The credit card business is typically a high volume low value business,with the potential
to break-even only beyond a certain volume of cards issued.the dependence on
technology is inevitable to keep the operating cost to the minimum

Other Fees

Credit companies are very good at coming up with fees for almost everything, so check
the fine print and make sure you know what they are. Some things to look out for include
over-the-limit fees, late-payment fees, return-item fees and set-up fees. Mostly these can
be avoided by careful management, but it's still handy to be prepared if you ever get
charged one.

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FACILITIES AND SERVICES :
Besides providing credit, the credit card organisations
extend some additional facilities to attract customers.Some of these facilities offered by
banks are explained below:

Risk Coverage
Depending on the type of card issued,some banks insure the cardholder free of
cost for a particular sum.For example,citibank offers a complimentary personal accident
insurance upto Rs.10lakhs in case of an air accident and upto Rs.2 lakhs in case of any
other accident.Similarly,the BOB card issued by the bank of Baroda extends insurance
protection to the cardholder's spouse also.It not only insures the cardholder against
personal accident to the tune of Rs.10lakhs in case of air travel,or Rs.5lakhs in case of
any other accident,but also gives the benefit of personal accident cover even to a non-
card holding spouse to the tune of Rs.2lakhs.

Twenty four hour service
The revolutionary phone banking service ensures that the banks extend 24
hour customer service to assist the cardholder,all seven days a week.For example,SBI
card help line available for SBI cardholders,is of great help to cardholders and provides a
variety of information required by customers.

Supplementary cards
Supplementary cards are issued to the family members of cardholders. A
cardholder of any bank can obtain a maximum of two supplementary cards at the
prevailing card fee for the immediate family members.
Photocard Option
Credit cards are now being issued with the photograph and signature of the
cardholder digitally imprinted on the front of the card. These cards offer easier
recognition and extra security.

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Travel privileges
Banks provide travel assistance to their cardholders by offering a wide range
of services linked to airline and hotel bookings,discounted holiday packages, car rentals
and more. For example,Bank of Baroda has entered into a tie-up with I.T.C.
Similarly,Hong Kong bank has a tie-up with SITA World Travels to provide a package of
exclusive travel services such as tele-ticketing,special holiday and conference
packages,international and domestic tickets,car rental services,etc.
Service over phone
Credit cardholders of selected banks can use thier cards to pay for personal
expenses where credit cards are not yet accepted.This is posssible by instructing the bank
over the phone to make payments for mutual funds,public issues, HP down payments,
and paying telephone and electricity bills,besides issue of drafts.
Purchase protection
This facility protects the purchaser against damage or loss caused due to fire
and theft at no extra cost. the cardholder can claim the value of the product damaged or
lost from the New India Assurance Company. This protection is available for a period of
ninety days from the date of purchase of the product using the card.
Emergency cash withdrawal
Citibank cardholders can withdraw emergency cash of upto 60 percent of the
credit limit from ATMs in all leading metropolitan cities. The Indian Bank, however does
not restrict cash withdrawing power only to a few automated and/or metropolitan
locations,but allows cash withdrawals from all notified branches of the indian Bank
across the country.
Medical advance facility
Cardholders can draw upto Rs.15000 in case of medical emergencies for meeting
expenses on treatment at locations other than their home town.This facility is available
with all Indian and Foreign banks,depending on the type of card issued by the bank.For
instance,standard chartered bank offers 10 to 20 percent discount on services at hospitals
in leading cities across the country. This facility covers special rates on medical
facilities,diagnostic tests,checks-ups, lab tests,nursing charges, and professional fees.

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CLASSIFICATION OF CREDIT CARD

Based on mode of credit recovery:

Revolving credit card:

This type of credit cards follows the revolving credit principle. A limit is set on the
amount of money one can spend on the card for a particular period. The cardholder has to
pay a minimum percentage of the outstanding credit which may vary from 5 to 10 percent
at the end of a particular period. Interest varying from 30 to 36 percent per annum is
charged on the outstanding amount.

Charge card : a charge card is not a credit instrument .It is a convenient mode of making
payment. This facility gives a consolidated bill for a specific period and bills are payable
in full on presentation. There is no interest liability and no pre-set spending limits either.

Based on status of credit card:

Standard card : Credit cards that are regularly issued by all card – issuing banks are
called “Standard cards”. With thesecards, it is possible for a cardholder to make
purchases withput having to pay cash immediately. Its however, offers only limited
privileges to cardholders. Some banks issue standard cards under the brand name “
Classic “ cards. These cards are generally issued to salarised people.

Business card : Business cards,also known as “executive” cards,are issued to small
partnership firms,solicitors,firms of chartered accountants, tax-consultants and others, for
use by executives on their business trips. The card enjoys higher credit limits and more
privileges than the standard cards.These cards are issued in the names of the executives
of the firms.

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Gold card : The gold card offers high value credit for the elite. It offers many additional
benefits and facilities such as higher credit limits, more cash advance limits etc that are

not available with standard or executive cards.

Based on geographical validity:

Domestic card : Cards that are valid only in India and Nepal are called ‘domestic cards’.
All transactions will be in rupees.These cards are issued by most of the banks in India.

International card : Credit cards that have international validity are called “international
cards”.They are issued to people who travel abroad frequently. These cards are honored
in every part of the world except India and Nepal. The cardholder can make purchases in
foreign currencies subject to RBI sanction and FEMA rules and regulations.

Based on franchise/tie-up :

Proprietary card : Cards that are issued by the banks themselves,without any tie-up,are
called ‘proprietary cards.’. A bank issues such cards under its own brand. Examples
include SBI card, cancard of canara bank, etc.,

Master card :This is a type of credit card issued under the umbrella of ‘mastercard
international’. The issuing bank has to obtain a franchise from the Mastercard

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Corporation of USA. The franchised cards will be honored in the Mastercard network.

Visa card : This is a type of credit card, which can be issued by any bank having tie-up
with VISA international corporation,USA. The banks that issue Visa cards are said to
have a franchise is that one can avail the facility of the VISA network for transactions.

Domestic tie-up card :

These are cards issued by a bank having a tie-up with domestic credit card brands such as
cancard and indcard,etc.for example, Indian Overseas Bank has tie-up with cancard.
These banks issue cards to users through the original banks. However,they can have their
bank name engraved on the card. Credit is available on similar lines to the original card.

Based on the issuer category:

Individual cards :

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These are the non-corporate credit cards that are issued to individuals. Generally all
brands of credit cards issue individual cards.

Corporate cards :

These are credit cards issued to corporate and business firms. The executives and top
officials of the firms use these cards. The card bears the name of the firm, and the bills
are paid by the firm.

Card Transaction process

When paying for purchases with a card, the transaction appears to happen almost
instantaneously after the PIN is entered. However, there is a complex payments
infrastructure behind the scenes making sure that the transaction is processed correctly.
The following diagram sets out the steps, numbered from 1 to 8, in a card transaction’s
payments cycle for a typical face–to–face or card present transaction; there are five
stakeholders in the process.

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Cardholder

This is a person with a debit, credit or charge card issued to them by a financial
institution.

The cardholder may be asked to place their card into the chip and PIN reader (PIN pad or
terminal) themselves, or hand the card to the merchant who will do this for them.
Alternatively, if the card does not have a chip (only a magnetic stripe) or the merchant
does not have a chip and PIN terminal, the merchant will swipe the card through the
terminal or use a paper voucher.

The customer will then key in their PIN, or sign, to indicate their agreement to proceed
with the transaction. An authorisation code will be given to the merchant for the
transaction by the cardholder’s card issuer that will appear on the terminal receipt that is
handed to the cardholder. The card issuer will debit the transaction to the cardholder’s
account.

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Retailer / Merchant

A merchant sells goods or services to their customer (the cardholder). This can be face-
to-face in a shop on the high street, where both the cardholder and their card are present,
or when taking orders remotely e.g. over the phone for a restaurant take away, a mail
order from a catalogue, or a purchase over the internet. In this example, it is a card not
present transaction.

The card transaction’s details are entered into the merchant’s terminal, usually, sent via
the telephone line to their acquiring bank who will process the transaction and send it on
to the relevant card issuer for authorisation and settlement.

Acquirer

A merchant, will have negotiated a Merchant Service Agreement with their acquiring
bank to process payment card transactions on their behalf. Typically, this agreement will
also include the acquiring bank providing one of its own terminals, known as a bank
owned terminal.

An acquiring bank is responsible for receiving the card transaction details from the
merchant’s terminal, passing these through to the card issuer (the cardholder’s bank or
building society) via the card scheme for authorisation and completing the processing of
the transaction.

An acquiring bank will arrange the card transaction’s settlement and will, typically, credit
the merchant’s nominated bank account with the funds within four working days.

An acquiring bank will also deal with any chargebacks or requests for information (RFI)
that they may receive from card issuers on any of their merchant’s transaction

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Card Scheme

Card Schemes are organisations who manage and control the operation and clearing of
card payment transactions according to card scheme rules.

The Card Schemes are responsible for passing card transaction details from the acquiring
bank to the issuer and for passing payment back to the acquiring bank who in turn pays
this to the merchant.

American Express, Diners Club, JCB, Maestro, MasterCard and Visa (including Electron
or Debit) are the card schemes that operate in the UK.
Issuer

The issuer is the bank, building society or financial organisation that provides a payment
card (debit, credit, pre-paid or charge card) to their customer or cardholder.

The issuer has responsibility for transactions made on cards that they have issued, and
will be responsible for debiting funds from the relevant cardholder's account.

Note: For American Express and Diners Club - the transaction process is slightly
different as they act as card scheme, issuer and acquiring bank at the same time. An
acquiring bank will be able to explain more about accepting these card types.

BENEFITS OF CREDIT CARDS
Credit cards offer enormous benefits to users and bankers alike.

Benefits to Cardholders
Shopping convenience :
Credit cards are convenient to use . They dispense with the need to carry large amount of
cash or issue cheques. Shopping is made comfortable as purchasing poses no difficulty,
since cards have wide acceptance.

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Credit facility :
Credit cards offer a convenient mode of credit to customers.The
customer need not go to the bank to apply for a loan that requires repayment in fixed
installments. The credit card enables the cardholder to avail the credit facility sanctioned
by the card issuing company.
The customer can either repay the amount of credit in full, or can opt for repaying it
in flexible montly installments.

Safety :
Credit cards allow for a safe means of conducting transactions. Credit
cardholders need not want to take a large amount of cash with them.

Meticulous record : Credit cards facilitate meticulous and easy record keeping. The
transactions are printed on a monthly statement that can be reconcilied with the sales
receipts issued by merchants. Thus, the accumulated interactions are easily accounted for
every month.

Acceptability : Merchant establishment widely accept VISA and Mastercard. This makes
it very convenient for holding a credit card.

Benefits to Merchants :

Enhanced Sales :
The credit card mechanism makes the buying process convenient and
easy. This in turn helps boost up the sales of business concerns as it increases purchasing
power.

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Easy validation :
The electronic system, which is the backbone of credit card operation,
allows for easy verification of details about the customer. This greatly facilitates sale
transactions by merchants.
No risk :
As there is no direct contact of the merchant establishment with collection of
payments on credit cards,there is no risk to the merchant in accepting credit facility.

Benefits to issuer Banks :

Source of income : Credit cards provide an easy way to extend credit to customers. The
credit, once granted, keeps revolving which results in the bank earning income through
interest.

Market expansion : Credit cards do not require the physical presence of a bank branch.
Credit cards can be used by banks to increase their market presence. For instance, an
ATM, which can be established in a place like supermarket, is accessible to the
consumer directly for financial transactions.

Cross - selling : Credit cards provide ample opportunity to banks for generation of
additional revenue. This is possible by cross – selling other banking products and
services to its existing and potential cardholders.
SPECIMEN OF CREDIT CARD
An example of the front in a typical credit card:

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1. Issuing bank logo
2. EMV chip
3. Hologram
4. Credit card number
5. Card brand logo
6. Expiry Date
7. Cardholder's name

An example of the reverse side of a typical credit card:

1. Magnetic Stripe
2. Signature Strip
3. Card Security Code

NEEDS OF CREDIT CARD - ADVANTAGES AND DISADVANTAGES

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A credit card from VISA, MasterCard, or any other network allows you to pay for
purchases or services by borrowing from the credit card company. You then repay by
making monthly payments towards the amount borrowed. That is, you do not have to
repay the whole borrowed amount in full at one go.

Then there are charge cards, such as the American Express card, that require full payment
of the borrowed amount each month.

Either way, the credit card is a very convenient alternative to paying by cash.

Essentially a credit card allows you to:

 Purchase products or services whenever and wherever you want, without ready
cash and paying for them at a later date.
 Have the option of paying only a part of the total expenses. The balance amount
can be carried forward, with an interest charged.
 Withdraw cash whenever, wherever you are, through ATMs and other withdrawal
centers.
 Enjoy a revolving credit limit without any charges for a limited period (mostly 20
to 50 days)
 Transact money of more than one currency, from one country to another.

Other facilities afforded on a credit card include reward points on card usage, insurance
cover against air and road accidents, loss of baggage, and so on. All credit cards have
built-in safety features like signatures and personal identification numbers. International
credit cards you financial flexibility when you travel abroad.

Advantages:

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 They allow you to make purchases on credit without carrying around a lot of cash.
This allows you a lot of flexibility.
 They allow accurate record-keeping by consolidating purchases into a single
statement.
 They allow convenient remote purchasing - ordering/shopping online or by
phone. They allow you to pay for large purchases in small, monthly installments.

 They are cheaper for short-term borrowing - interest is only paid on the remaining
debt, not the full loan amount.

 Many cards offer additional benefits such as additional insurance cover on
purchases, cash back, air miles and discounts on holidays.

Disadvantages:
 You may become an impulsive buyer and tend to overspend because of the ease
of using credit cards. Cards can encourage the purchasing of goods and services
you cannot really afford.

 Credit cards are a relatively expensive way of obtaining credit if you don't use
them carefully, especially because of the high interest rates and other costs.

 Lost or stolen cards may result in some unwanted expense and inconvenience.

 The use of a large number of credit cards can get you even further into debt.

 Using a credit card, especially remotely, introduces an element of risk as the card
details may fall into the wrong hands resulting in fraudulent purchases on the
card. Fraudulent or unauthorized charges may take months to dispute, investigate,
and resolve.

CREDIT RATING AGENCY

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A credit rating agency (CRA) is a company that assigns credit ratings for issuers of
certain types of debt obligations as well as the debt instruments themselves. In some
cases, the servicers of the underlying debt are also given ratings. In most cases, the
issuers of securities are companies, special purpose entities, state and local governments,
non-profit organizations, or national governments issuing debt-like securities (i.e., bonds)
that can be traded on a secondary market. A credit rating for an issuer takes into
consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and affects
the interest rate applied to the particular security being issued. (In contrast to CRAs, a
company that issues credit scores for individual credit-worthiness is generally called a
credit bureau or consumer credit reporting agency.)

Credit Rating Agencies for Corporations & Government Entities

Agencies that assign credit ratings for corporations include:

 M. Best (U.S.)
 Baycorp Advantage (Australia)
 Dominion Bond Rating Service (Canada)
 Fitch Ratings (U.S.)
 Japan Credit Rating Agency (Japan)
 Malaysian Rating Corporation (Malaysia)
 Moody's (U.S.)
 Standard & Poor's (U.S.)
 Pacific Credit Rating (Peru)
 Rating Agency Malaysia (Malaysia)
 Egan-Jones Ratings Company (U.S.)
 Capital Intelligence Ltd (Cyprus)
 CRISIL (India)
 ICRA (INDIA]

CREDIT CARDS AND THERE INTEREST RATES:

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Credit card Interest Interest Balance
Name rate(%) free days trans.rate

35.40 50 1.50
HDFC Woman's Gold Credit Card

ICICI Titanium Credit Card 45.O9 52 1.50

HDFC Silver Credit Card 35.40 50 1.50

Barclays Premier League 37.20 50 1.00
Credit Cards

Barclays Yatra Credit Cards 35.40 50 1.00

HDFC Visa Signature Credit Cards 34.48 50 1.50

HDFC Corporate Credit Card 35.40 50 1.50

ICICI Hpcl Gold Credit Cards 49.36 52 1.50

ICICI Gold Business Credit Card 49.36 45 1.50

CREDIT CARD FRAUDS

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The rapid growth of the payment card industry worldwide has lead to a dramatic rise in
credit card frauds. A significant amount of money is lost because of frauds.

Major sources
Some of the major sources of fraud loss include the following ;
• Fraudulent application that result in cards being issued to imposters who have
adopted the identity of a real person or conceived a bogus identity.
• Lost, stolen and never received cards are among the major causes for fraud.
• Counterfeit and altered cards.
• Collusive merchants.
• True cardholder fraud where the true cardholder perpetrates fraud.
• Employee fraud.
In a recent exposure of credit cards frauds, an international
network was unearthed where duplicate credit cards were created abroad and
smuggled into India. The foreign passport and other relevant documents were
fabricated locally with material sent from abroad. Such fake cards prepared in Canada
and Malaysia were sold for rates ranging from rupees one to two lakhs.
The information for these cards, had been clandestinely recorded at
shopping malls while billing genuine cards.The shopkeepers who were involved in
the racket had installed programs in their billing system which would secretly record
details such as name, secret code and other personal information remain the same, the
photographs were swapped with that of the thief. Supporting bogus travel documents
including passports were made to avoid suspicion.

Credit card fraud is a major issue in the west, but many countries limit the owner’s
liability for fraud and theft with insurance. However, users of cards in India have no

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such cover, despite the aggressive promotion of cards by various companies and
banks.
DRAWBACKS OF CREDIT CARDS
Credit card has many drawbacks for the user, issuer, and the merchant establishments
alike. Some of these are :

Waste of money : It would be a waste of money to subscribe to a credit card if the card
was not utilized.
Thoughtless buying : Credit cards invariably encourage impulsive purchases. Since the
user need not pay instantly, it may tempt the purchase of products/services that are not
genuinely required.
Financial problem : These happens where repayment on the credit card account is not
done promptly.
Mental agency : The pressure tactics used by recovery agents appointed by some card
issuers to collect outstanding dues may cause mental agony to the user.

PREVENTION:
Considerable time and money are spent in controlling credit card frauds. Some of
the methods used in prevention of frauds are:

 Maintaining details of fraudulent application files,preferably in an automated
environment.
 Establishment of credit Information Bureaus(CIB) which provide the credit
history of individual borrowers through credit reports.
 Designing systems to moniters cardholder activity and identify unusual spending
behaviour
 Educating cardholders on card frauds and creating awareness about measures to
prevent frauds
 Merchant education in reconnizing and Intercepting counterfeit cards
 Strict and comprehensive controls at the manufacturing level to ensure that each
credit card meets established standards and strictly conforms to all security

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requirements.
 Merchant monitoring procedures to moniter both authorizations and deposits.

INTRODUCTION ABOUT THE COMPANY :

COMPANY PROFILE :

ICICI Bank: ICICI Bank is India's second-largest bank. The Bank has a network of
about 573 branches and extension counters and over 2,000 ATMs. ICICI Bank was
originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its
wholly-owned subsidiary.

"ICICI Bank is India's second largest Bank with consolidated total assets of over Rs.
470,000 crores and networth of over Rs. 50,000 crores. The Bank's capital adequacy ratio
of 15.6% is among the highest levels of capital adequacy in large Indian banks and much
higher than the regulatory requirement of 9.0%. ICICI Bank made a profit after tax of Rs.
4,158 crore (over US$ 850 million) in FY2008 and Rs. 3,014 crore (US$ 619 million) in
the nine months ended December 31, 2008."

ICICI was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses.

ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross
border needs of clients and leverage on its domestic banking strengths to offer products
internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada
and Russia, branches in Singapore and Bahrain and representative offices in the United
States, China, United Arab Emirates, Bangladesh and South Africa.

Today, ICICI Bank offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels and through its

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specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management.

ICICI BANK

Capital strength and Net profit :
Chart showing the ICICI bank capital strength with other banks and
increase in net profit by year by year. As below;

Net
profit :

26

Net profit has been increased to more than 4000 crores in the financial
year 2008.
Origin of ICICI Bank :
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to
the public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank
offered made an equity offering in the form of ADRs on the New York Stock Exchange
(NYSE), thereby becoming the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE. In the next year, it acquired the
Bank of Madura Limited in an all-stock amalgamation. Later in the year and the next
fiscal year, the bank made secondary market sales to institutional investors.

With a change in the corporate structure and the budding competition in
the Indian Banking industry, the management of both ICICI and ICICI Bank were of the
opinion that a merger between the two entities would prove to be an essential step. It was
in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the
amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank. In the following year, the merger was approved by its shareholders, the High Court
of Gujarat at Ahmedabad as well as the High Court of Judicature at Mumbai and the
Reserve Bank of India.

27

Branches
ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has
1,420 branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has
made its presence felt in 18 countries - United States, Singapore, Bahrain, Hong Kong,
Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in
United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and
Indonesia. The Bank proudly holds its subsidiaries in the United Kingdom, Russia and
Canada out of which, the UK subsidiary has established branches in Belgium and
Germany.

AWARDS & RECOGNITIONS

ICICI bank in 2008

 The Asset Triple A Country Awards for Best Domestic Bank in India.

 ICICI Bank wins the "Best Bank in India" Award from NDTV Profit-Outlook
Money

 ICICI Bank wins the 'Excellence in Remittance Business 2008' award by The
Asian Banker

 ICICI Bank wins Finance Asia Country Awards for Achievement 2008 for
• Best Trade Finance Bank • Best Foreign Exchange Bank
• Best Private Bank

28

 ICICI Bank wins the 'Excellence in Remittance Business 2007' award by The
Asian Banker

 EuroWeek award for “Most Improved Market Profile”

 The Asset Triple A Transaction Banking Awards, 2008
• Best Trade Finance Bank in India • Best Transaction Bank in India
• Best Cash Management Bank in India • Best Domestic Custodian in India

 Global Finance Award for:
• Best "Trade Finance Bank and Provider" in India
• Best "Consumer Internet Bank" in India

Present Scenario

ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited. Overseas, its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE). As of De cember 31, 2008,
ICICI is India's second-largest bank, boasting an asset value of Rs. 3,744.10 billion and
profit after tax Rs. 30.14 billion, for the nine months, that ended on December 31, 2008.

ICICI Bank concluded India's largest ever securitization transaction of a
pool of retail loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion)
in a multi-tranche issue backed by four different asset categories. It is also the largest deal
in Asia (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-Japan &
Australia) since the beginning of 2007.

29

Success story

Today, ICICI Bank,India has the largest market share and value among all banks in retail
or consumer financing. ICICI Bank is the largest issuer of credit cards in India. It was the
first bank to offer a wide network of ATM's and had the largest network of ATM's till
2005, before SBI caught up with it.

ICICI bank now is widely seen as a sophisticated bank able to take on many global banks
in the Indian market. The bank is expanding in overseas markets. It has operations in the
UK, Hong Kong, Singapore and Canada. It acquired a small bank in Russia
recently. It has tie-ups with major banks in the US and China. The bank is aggressively
targeting the NRI (Non Resident Indian) population for expanding its business.

OBJECTIVES OF THE STUDY :

 Primary Objectives :

 To know the reasons for using credit cards.
 To know the preference for using ICICI bank credit cards.
 To know the Customer satisfaction regarding the credit card.
 To know the preference for various other bank credit card.
 To know the rate of preference for using ICICI bank credit card with
other bank credit card.

 Secondary objectives :

30

 To find the frequency of usage of their Credit card for daily purpose.
 To find the satisfaction levelof the Credit Card.
 To find out who prompted the customer to apply for a particular Credit
Card.
 To find out the range of the age where the largest number of users fall
in.
 To find the percentage of multi credit card users.

SCOPE OF THE STUDY

The study undertaken for usage of credit card by the customer and to know the
preference regarding the ICICI Bank credit card and also the preference for various other
bank credit card and aims to find the reason of choice for selecting a particular Credit
card and relative preference of customers for various credit.

This study is done with the help of a questionnaire which contains questions
which probe into the details so as to find the reason of their choice. The study will help
to know the features which attracted the customers. The study helps to know about the
usage pattern of credit card users. The study also helps to find the best possible way of
reaching the customers. The study will also helps in choosing a best credit card bank. All
these results will help the consumer to know the features, functions and to create
awareness of using credit card. This study will also help the bank to create a product

31

which suits the high profile customers and helps to adopt a particular method to reach the
customers.

LIMITATIONS OF THE STUDY
The limitations of the study are as follows

 The study is applicable only to the credit cardholder. It is not be fully applicable

to other cardholders.

 In some cases the cardholder is not fully aware about their bank credit card.

• The area of study is limited to cities and towns only ,because most of the village

people do not have a credit card.

• During the collection of data, respondents are not responding with their full

interest.

• As it is a sensitive topic, the respondents have not given clear information. So

researcher was unable to conduct in depth study.

32

• In some cases the respondents does not remember the exact usage pattern which

creates a bias.

• Sample size of the project is very small, so we can’t come to an clear idea about

the project.

• Some customers where not available.

• REVIEW OF LITERATURE

INDIAN SCENARIO :

The first credit card to enter India was the diners club card in the year 1964. the first
Indian banks to launch credit cards were Andhra bank was VISA classic in the year
1981,followed by central bank of India’s credit card in collaboration with Master Card
Corporation in the same year. The other nationalized banks, canara banks, bank of
India,and bank of baroda,etc. Gradually introduced their credit cards in India only later.
Apart from these Indian banks,many foreign banks such as citi bank, standard chartered
bank, ANZ Grindlays bank, bank of America and American express bank have also
introduced their proprietary and other franchised cards through their Indian branches.

Citibank issues diners club card, Andhra bank now offers four types of credit cards for
different categories of people,including the VISA ICC card for international usage.
Similarly,Canara bank has a range of cards, from their proprietary cancard to franchised
cards such as cancard visa,cancard master ,and VISA international gold cards,etc., bank
of baroda has started its BOBCARD master, and developed to BOBCARD (global).

33

Today, this bank issues 4 types of credit cards. The bank issues regular card, international
card, ATM card and very recently, the ATM-cum-debit card.

There are about 12 major banks,both foreign and Indian, which currently provide cards in
India. Many other banks,such as Indian Overseas Bank,Dena Bank, Corporation Bank ,
and Vysya Bank have affiliations with the principal issuers like Canara Bank, Citibank,
bank of India,etc., for issuing credit cards using the brand name of the original issuers..

The card industry in India is poised for big growth, thanks to the technology revolution
that is taking place. The Reserve Bank of India is taking special measures to promote the
use of alternate payment systems like credit cards, debit cards, etc. to ease the pressure on
currency printing and the use of cheques. On the legal front too, the developments in

India are becoming favorable to the card industry. Banks can now file summary suits
against defaulters for quicker recovery of credit card dues. This has made an increasing

number of Indian banks realize the credit card potential and spurred them to enter the
ever-expanding card business.

Prepaid/stored value cards are also gaining popularity in the Indian market. For
instance,oil companies issue “petrocards” for easier payment at the company’s petrol
stations.similarly, the Mahanagar Telephone Nigam Limited (MTNL) has already
introduced its “virtual calling card “ and has recently launched a co-branded telecom
credit card to facilitate payment of telephone bills.

Credit card lending has surged to such an extent that average loan amounts ($32,400 in
2004) made to small businesses with revenues greater than $1 million were actually
smaller than average loan amounts ($42,600) made to the smallest businesses with
revenues under $1 million12. The larger small businesses are receiving a greater portion
of credit card loans than the smallest small businesses.

34

Some Indian banks have made an entry into the smart card business too. However, a
further thrust in these areas will come only with operational experience and also by
having greater clarity on payment modes and their implications for policy conduct. The
Reserve bank of India (RBI) has formed a working group in the Department on the smart
rupees system (smars) project, undertaken by IIT-Mumbai.

Some of the banks are planning to launch WAP based mobile banking services.the
service will provide information such as online balance updates and details of the last five
transactions, besides accepting requests for chequebooks nand statements. Such a service
aims at providing specialized services such as fund transfer, bill payment , shopping
facilities, investment advisory, etc.,

Sujit Chakravorti
Federal Reserve Bank of Chicago - Research Department

Abstract:

Credit cards provide benefits to consumers and merchants not provided by other payment
instruments as evidenced by their explosive growth in the number and value of
transactions over the last 20 years. Recently, credit card networks have come under
scrutiny from regulators and antitrust authorities around the world. Focusing on
interrelated bilateral transactions, several theoretical models have been constructed to
study the implications of several business practices of credit card networks. Suggestions
for future research are also discussed.

The phenomenal growth witnessed globally in the 20th century in
the manufacturing industries sector helped fulfil man’s physiological needs like food,
shelter and clothing in a big way. Increasing demand for satisfaction of these needs
engineered the proliferation of companies involved in their manufacture of variations to

35

the same product. Simultaneously, economic, social, cultural and technological
development of society led to the growth of the service industry.

Further, society also exhibited increasing affluence combined with growing
complexity of life. The worldwide boom witnessed in the consumer. Credit card only
marked the beginning of the new era of banking and financed system. It has also became
a practice among the trading firm to extend liberal credit to customers.

RESEARCH METHODOLOGY

• Research Design
A research design is a detailed blue print used to guide a research
study toward its objective. The process of designing a research study involves many
interrelated decisions. The most significant decision is the choice of research approach,
because it determines how the information will be obtained. The choice of the research
approach depends on the nature of the research that one wants to do.
A research design is the arrangement of conditions for collecting and
analyzing of data in a manner that aims to combine return to the research purpose with
economy in procedure.

The research design adopted for this study is Descriptive Research.

Descriptive method was adopted because it deals with description of the state of affairs
as it exist at present. Determine the frequency with which something acquire or its
association with something else. It is to formulate based on the objective of the study.

36

• Sampling Design

Simple random sampling technique is used for collection data from 50 respondents from
the total population of credit card users.
Simple Randon sampling

The unrestricted, simple random sampling is the simplest form of probability
sampling. Since all the probability samples must provide a known nonzero chance of
selection for each population element, the simple random sampling is considered a
special case in which each population element has a known and equal chance of
selection. In this section, we use the simple random sample to build a foundation for
understanding sampling procedures and choosing probability samples.

Simple random sampling is often impractical. It requires a population list that is
often not available. The design may also be wasteful because it fails to use all the
information about a population. In addition, simple random design may be expensive in
time and money.

Sample unit

The sampling unit has taken by the researcher for selecting the samples with
different credit card customer from ICICI bank and various other banks.

Sample size

50 samples have chosen to find the objective of the study.

• Method of Data Collection
Questionnaire method of data collection is the most common instruments of data
collection it contains a set of questions logically related to a problem of study. The
respondents were required to answer the question by themselves, the questions are
explained to the respondents because all of them are uneducated. The researcher believed
that, the questionnaire framed might lead to gather the relevant data’s in a successful
manner. The researcher framed the questionnaire in English.

37

The questionnaire was based on different data namely.
 Personal data
 Personal expenses
 Usage of credit card
 Security
 Customer care
 Risk coverage
 Interest charges
 Discount facilities
 Drawbacks and
 Quick process

Source of data collection

Data can be obtained from various sources.
1) Primary data
2) Secondary data

Primary data

The researcher with the help of questionnaire collects the primary data. The
questionnaire was described specially for employees. The primary data was collected
from the employer through personal interview method. The questionnaire consists of both
closed and open-end questions. Were used to significant the unit of the employees with
lesser time of answering to the questions.

Secondary data

Secondary data has been collect by the researcher from the details of welfare
schemes offered, company profile, organization structure, Earlier records from journals,
magazines and others sources etc.

38

Statistical Tool:
Percentage Method:

In this study, the researcher has used the percentage analyses method. Percentage
analyses are done to determine the percentage value for all the different questions used.
Percentage used for making comparison between two or more series of data.

No. of respondents
Percentage % = __________________________ X 100
Total no. of respondent

TABLES AND INTREPRETATION
AGE OF RESPONDENTS
TABLE – 1
S. No Particulars No. of Respondents Percentage
1 Below 30 years 04 8%
2 30- 35 years 12 24%
3 35-40 years 24 48%
4 Above 40 years 10 20%
Total 50 100%

Inference:
From the above table it clear that 8% of respondents were below 30 years, 24%
respondents were 30-35 years, 48% respondents were 35-40 years and 20% respondents
were above 40 years.
So majority of the respondents were 35-40 years, because after when they enter into a
family they need to pay more money for expenses.
CHART- 1

AGE OF RESPONDENTS

39

Age of Respondents

8%
20%

24% Below 30
30 - 35 Years
35 - 40 Years
Above 40

48%

INCOME OF THE RESPONDENTS
TABLE - 2

S.No Income No.of Respondents Percentage
1 Below 10,000 02 4%
2 10,000 - 20,000 12 24%
3 20,000 - 30,000 26 52%
4 Above 30,000 10 20%
Total 50 100%

Inference:
From the above table it clear that income of respondents.4% respondents were below
10,000, 24% of respondents were 10,000 – 20,000, 52% of respondents were 20,000 –
30,000, and 20% of respondents getting above 30,000.
So majority of the respondents were getting income of 20000 – 30000 per month.

CHART - 1.2

INCOME OF THE RESPONDENTS

40

Income of the Respondents

60
52
50

40 Below 10000
10000 - 20000
30 24
20 20000 - 30000
20 Above 30000

10 4
0
Below 10000 10000 - 20000 20000 - 30000 Above 30000
Salary

TYPES OF BANKS
TABLE – 3
S. No: Banks No. of. Percentage
Respondents
1 ICICI Bank 27 54
2 HDFC Bank 10 20
3 SBI Bank 09 18
4 CITI Bank 04 8
Total 50 100
Inference:
From the above table inferred that 54% of respondents are the credit cardholder of
ICICI Bank and 20% of respondents are the credit cardholder of HDFC Bank and 18% of
respondents are comes under SBI Bank and 8% of CITI Bank.
The highest no of respondents are from ICICI Bank and the lowest no of
respondents are from CITI Bank.
From these Table 1 we can clearly understand that most no. of consumer prefer ICICI
Bank credit cards only.
CHART - 3

41

Type of Bank

60

50

40
No.of Respondents
30
Percentage
20

10

0
ICICI Bank HDFC Bank SBI Bank CITI Bank
Banks

USAGE OF CREDIT CARD
TABLE – 4
S. No: Response No. of. Percentage
Respondents
1 Less than one year 06 12
2 One to two year 14 28
3 Two to three year 21 42
4 More than three year 9 18
Total 50 100

Inference:
From the above table inferred that 12% of respondents are using the credit card
for less than one year, 28% of respondents are using for one to two year, 42% are using
for Two to three year and 18% of them are using for More than three years.
The highest no of respondents are using the credit card for two to three year and
lowest no. of respondents are using for less than one years.

CHART - 4

42

Usage of Credit Card

45 42
40
35
30 28
25 21
20 18
14 No.of Respondents
15 12
10 9 Percentage
6
5
0
Less than One to Two Two to More than
One Year Year Three year three year
Response

NO.OF CREDIT CARDS
TABLE – 5

Respondents
1 One 20 40
2 Two 16 32
3 Three 12 24
4 More than three 02 4
Total 50 100

Inference:
From the above table inferred that 40% of respondents are having only one credit
card, 32% of respondents are using two credit cards, 24% are using three and 4% of
them are using More than three credit card.

43

The highest no of respondents are using one credit card and lowest no. of
respondents are using more than three credit card.
CHART – 5

No.of Credit Cards

4%

24%
40% One
Two
Three
More than Three

32%

KNOWLEDGE ABOUT THE CREDIT CARD
TABLE – 6

Respondents
1 Self mode 10 20
2 Bankers approach 16 32
3 Relatives 10 20
4 Advertisements 14 28
Total 50 100

Inference:
From the above table inferred that 20% of respondents are came to know about
their bank credit card by self mode, 32% of respondents are by Bankers approach, 20%
by relatives and 28% of them are by advertisements.

44

The highest no of respondents are came to know by Bankers approach and lowest
no. of respondents are by self mode and relatives. From this Table – 6 we can understand
that credit card issuing banks are playing a vital role in increasing the customers.

CHART – 6

50
45
40
35
30
No.of Respondents
25
Percentage
20
15
10
5
0
Self mode Bankers Relatives Advertisement
Approach

USAGE OF CREDIT CARD – LIFE LONG
TABLE – 7
Respondents
1 Yes 34 68
2 No 16 32
Total 50 100

Inference:
From the above table inferred that 68% of respondents are want to be a credit
cardholder for a life long, 32% of respondents are not willing to be a credit cardholder for
life long.
From this Table - 7 we can understand that credit cardholders are satisfied with
all its benefits, facilities and services made by the bankers to the credit card customer.

45

CHART - 7

Usage of Credit card - life long

32%

Yes
No

68%

FEATURES OF CREDIT CARD
TABLE – 8

Respondents
1 Low interest rate 08 16
2 Easy to handle 20 40
3 Facilities and services 12 24
4 More benefits 10 20
Total 50 100

Inference:
From the above table inferred that 16% of respondents are prefer their bank credit
card for low interest rate, 40% of respondents are by easy to handle, 24% by facilities
and services and 20% of responents are by getting more benefits by using the credit
cards.
The highest no of respondents are prefer their bank credit card for easy to handle
and lowest no. of respondents are by low interest rate. From this Table-8 we can
understand that credit cards are mainly used by the customer for easy to handle.

46

CHART - 8

Features of Credit Card

40
35
30
25
20
15 Percentage
10
5
0
Low interest Easy to handle Facilities and More Benefits
rate Services

IMPORTANCE OF CREDIT CARD
TABLE – 9

Respondents
1 Strongly Agree 18 36
2 Agree 22 44
3 Disagree 08 16
4 Strongly Disagree 02 04
Total 50 100

Inference:
From the above table inferred that 36% of respondents are strongly agree that the
usage of the credit card is more important, 44% are agree, 8% are disagree and 4% are
strongly disagree .
The highest no of respondents are agreed the usage of credit card is more
important and lowest no. of respondents are strongly disagreed.

CHART – 9

47

Importance of Credit Card

4

18
16 Strongly Agree
Agree
Disagree
Strongly Disagree

22

CREDIT CARD- SECURITY
TABLE – 10

Respondents
2 Agree 22 44
3 Disagree 10 20
Total 50 100

Inference:
From the above table inferred that 32% of respondents are Strongly Agree that
the credit card issued by their bank gives more security, 44% of respondents are Agree,
20% are Disagree and 4% of respondents are Strongly Disagree.
The highest no of respondents are Agree and lowest no. of respondents are
Strongly Disagree. From this Table – 10 we can understand that credit card issuing banks
gives more security to the credit cardholders and their cards.
CHART – 10

48

Credit Card - Security

Strongly Disagree

Disagree
Percentage
No.of.Respondents
Agree

Strongly Agree

0 10 20 30 40 50

RESPOND TO CUSTOMER
TABLE – 11
Respondents
2 Agree 18 36
3 Disagree 14 28
Total 50 100

Inference:
From the above table inferred that 28% of respondents are Strongly agree that
their banks cutomer care are personally respond at all time, 36% of respondents are
agree, 28% are disagree and 8% are Strongly Disagree.
The highest no of respondents are Agree that their banks are personally respond at
all time and lowest no. of respondents are Strongly Disagree. From this Table - 11 we can
understand that credit card issued banks are personally responding their customer at all
time to fulfill their satisfaction regarding their bank.
CHART – 11

49

Respond of Customer care

40
36
35
28
30 28
25
20
15 Percentage
10
8
5
0
Strongly Agree
Agree Disagree Strongly
disagree

RISK COVERAGE
TABLE – 12

Respondents
2 Agree 28 56
3 Disagree 06 12
Total 50 100

Inference:
From the above table inferred that 32% of respondents are strongly Agree that
credit cards will covers the risk,56% of respondents are agreed and 12% of respondents
are Disagree.
The highest no of respondents are agree and lowest no. of respondents are
Strangly Disagree.

CHART – 12

50

Risk Coverage

12% 0%

32%
Strongly Agree
Agree
Disagree
Strongly Disagree

56%

OFFERS TO CREDIT CARDHOLDER
TABLE – 13

Respondents
2 Agree 20 40
3 Disagree 18 36
Total 50 100
Inference:
their bank offer the credit cardholder an existing range of prizes, special range of
discounts and privileges, 40% of respondents are agree,36% of respondents are Disagree
and 8% of respondents are Strongly Disagree.
Strongly Disagree. From this Table – 13 we can understand that credit card issuing banks
are mostly offer an existing prizes to stable in the market and to lead between the
competitors.
CHART - 13

51

Offers to Credit Cardholders

8
Strongly Disagree
Response

36
Disagree

40 Agree
Strongly Agree
12

0 10 20 30 40 50
Percentage

PERSONAL EXPENSES
TABLE – 14

Respondents
2 Agree 24 48
3 Disagree 12 24
Total 50 100

Inference:
their banks are accepted to pay for personal expenses, 48% of respondents are Agree,
24% are Disagree that most of the bank will not pay their personal expenses upto certain
limits of cash and 8% of respondents are Strongly Disagree.
Strongly Disagree. From this Table - 14 we can understand that credit card banks are
accepting to pay for personal expenses and they deeply enters into the customers
preference on credit card and make them satisfaction.
CHART – 14

52

Credit card - Accepted to pay for Personal Expenses

Strongly disagree
Rsponse

Disagree

Agree Percentage

Strongly Agree

0 10 20 30 40 50

percentage

PROPER RECORDS TO CREDIT CARDHOLDER
TABLE – 15

Respondents
2 Agree 22 44
3 Disagree 16 32
Total 50 100

Inference:
From the above table inferred that 16% of respondents are Strongly Agree that the
banks gives the proper records of the credit card, credit rate calculations that are made,
44% of respondents are Agree, 32% are Disagree and 8% of them are Strongly Disagree.
Strongly Disagree. From this Table-15 we can understand that credit card banks are
issuing proper records of calculations to the cardholders.
CHART – 15

53

Proper Records

70
60

50
40 No. of Respondents
30 Percentage

20

10
0
Strongly Agree Agree Disagree Strongly
Disagree

DISCOUNT FACILITIES IN MORE NO. OF EXPENSES
TABLE -16

Respondents
2 Agree 20 40
3 Disagree 18 36
Total 50 100
Inference:
their bank credit card are issuing discount facilities for more no. of expenses,40% of
respondent are Agree, 36% are Disagree that their banks are not issuing discount
facilities, and 4% of them are Strongly Disagree.
Strongly Disagree. From this Table -16 we can understand that credit card issuing banks
are playing a vital role in issuing discount facilities for more no.of expenses.
CHART – 16

54

Discount Facilities

40%

Strongly Agree
Agree
Disagree
36%
Strongly Disagree

20%
4%

CREDIT CARD – INTEREST CHARGES
TABLE – 17

Respondents
2 Agree 14 28
3 Disagree 22 44
Total 50 100

Inference:
their bank credit card charges more interest than other banks, 28% of respondent are
Agree, 44% are Disagree that their banks are not charging more interest than other banks,
and 16% of them are Strongly Disagree.
The highest no of respondents are Disagree and lowest no. of respondents are
Strongly Agree. From this Table – 17 we can clearly understand that their credit card
issuing banks are not charging more interest than other bank.
CHART – 17

55

Interest Charges

45
40
35
30
25
Percentage
20
15 No. of Respondents
10
5
0
Strongly Agree Disagree Strongly
Agree Disagree

CREDIT CARD – IN BUSINESS
TABLE – 18

Respondents
2 Agree 26 52
3 Disagree 08 16
Total 50 100

Inference:
their bank credit cards are more useful for their business than other banks, 52% of
respondent are Agree, 16% are Disagree that their banks are not more useful for their
business and 4% of them are Strongly Disagree.
Strongly Disagree. From this Table – 18 we can clearly understand that their credit card
issuing banks are more useful for their business transactions.
CHART – 18

56

Credit card - In Business

4%
16%
28%

Strongly Agree
Agree
Disagree
Strongly Disagree

52%

CREDIT CARD - DRAWBACKS
TABLE – 19

Respondents
2 Agree 18 32
3 Disagree 08 16
Total 50 100

Inference:
From the above table inferred that 44% of respondents are Strongly Agree that there are
more drawbacks in other bank credit cards, 32% of respondent are Agree, 16% are
Disagree that there are not more drawbacks in their bank credit card and 4% of them are
Strongly Disagree.
The highest no of respondents are Strongly Agree and lowest no. of respondents
are Strongly Disagree. From this Table – 19 we can clearly understand that their bank
credit cards are less drawbacks than other bank credit cards.
CHART - 19

57

Drawbacks - Credit card

50
44
45
40
35 32
30
No.of Respondents
25 22
18 Percentage
20 16
15
10 8
4
5 2
0
Strongly Agree Agree Disagree Strongly Disagree

QUICK PROCESS
TABLE – 20

Respondents
2 Agree 24 48
3 Disagree 12 24
Total 50 100

Inference:
the process of their bank credit card can be done very quickly than other bank, 48% of
respondent are Agree, 24% are Disagree that the process of credit card cannot be done
very quickly and 4% of them are Strongly Disagree.
Strongly Disagree. From this Table – 20 we can clearly understand that their bank credit
cards process can be done very quickly.

CHART – 20

58

Quick Process

Strongly Disagree

Disagree
Percentage
No.of Respondents
Agree

Strongly Agree

0 10 20 30 40 50 60

ADVANCE FACILITIES

TABLE – 21

Respondents
1 Yes 36 72
2 No 14 28
Total 50 100

Inference:
From the above table inferred that 72% of respondents will change their credit
card if other banks offers adavance facilities,28% of respondents will not change their
bank credit card due to satisfied and their bank brand name.

CHART – 21

59

Advance Facilities

28%

Yes
No

72%

RATE OF CREDIT CARD
TABLE -22

Respondents
1 Highly satisfied 14 28
2 Satisfied 28 58
3 Dissatisfied 06 12
4 Highly Dissatisfied 02 04
Total 50 100

Inference:
From the above table inferred that 28% of respondents are rate Highly satisfied to
their bank credit card with the bank performance, process and facilities provided by their
bank, 58% of respondents are rate Satisfied, 12% of respondents are Dissatisfied on their
facilities, features and process of their bank credit card, 4% of them rate Highly
Dissatisfied.
The highest no of respondents rate Satisfied and lowest no. of respondents rate
Highly Dissatisfied.

60

CHART – 22

Rate of Credit card

4%
12%
27%

Highly Satisfied
Satisfied
Dissatisfied
Highly Dissatisfied

57%

FINDINGS :

From the above project, we have find the following ;

 We find that 48% of respondents age were 35-40 years.
 We find that 52% of respondents were getting income of 20000-30000 per month.
 54% of respondents are offer the credit card of ICICI Bank.
 42% are have been using the credit card for a period of two to three years.
 40% of respondents were using only one credit card.
 32% have came to know about their bank credit card by Bankers Approach.
 68% of respondents are want to be a credit cardholder for life long.
 40% are prefer their bank credit card for the reason of Easy to Handle.
 44% of respondents agreed that the usage of credit card is more important.
 44% of respondents are agreed that their bank credit card gives more security to
the credit cardholders.
 36% are agreed that their bank customer care personally respond at all times.
 56% of respondents are strongly agreed that their credit card will covers the risk.
 40% of bank offers the credit cardholders an exiting range of prizes, special
discounts and privileges.

61

 48% are agreed that their bank credit cards are accepted to pay for personal
expenses.
 44% of respondents are agreed that their banks gives the proper records of the
credit card, credit rate calculations that are made.
 40% of respondents are agreed their bank provides Discount facilities for more no
of expenses than other bank.
 44% are disagreed that their bank credit cards are not charges more interest to
their credit cards.
 52% of their bank credit card is more useful for their business than other bank.
 44% are Strongly Agree their bank has less drawbacks than other bank.
 48% are agreed that they process of their credit card can be done very quickly.
 72% will change their credit card if other banks offers adavance facilities.
 58% of respondents are rate their bank credit card as Satisfied.
SUGGESTIONS:

A credit card is an amazing financial product that can provide you with a lot of benefits if
you use it properly. Unfortunately if used wrongly it can also produce much harm and
damages. As you can see, as any other financial product, these are only an instrument for
achieving certain goals. It is the actual use that you give to that instrument what will
eventually produce benefits or damages to your credit and financial life.

Most of the best tips for using a credit card wisely are just common sense. Even though,
it’s surely easier to pay the balance or minimum or some amount in between and move on
to more interesting things.

But keep in mind that errors are fairly common on credit card statements. Even if you
don’t have all of your credit card receipts handy, compare as many as you have to the
items listed in your statement to make sure the dates and amounts are right.

Also, credit card issuers are heavily regulated. They have to publish the changes they’re
making to your account and they do this in the fine print at the bottom or on the back of
the monthly statement. Most count on people not reading these notices.

62

Following are some tips on how to use them smartly to avoid the drawbacks while taking
advantage of the benefits they provide.

 Shop around before signing anything
 Keep your balance within reasonable levels
 Control your purchases
 Protect your personal info
 Try not to pay only the minimum payment
 Do not keep too many credit cards
 Read your statement every month.

CONCLUSION:

From this study, I conclude the following ;

Technology has played and shall continue to play a crucial role in the payment card
industry. For the last thirty years, the card industry has been successfully using their
technology to satisfy their customer.
 The credit card plays a vital role in this modern world. Credit card are convenient
to use and provide an easy way to extend credit to customers.
 It helps their customer in many way and provide facilities to them.
 ICICI Bank provides their customer to satisfy regarding the usage of credit card.
 So, more of the consumers prefer to get ICICI Bank credit card than other bank
credit card.They satisfy the customer regarding the following;
o Quick Process
o Gives more security
o Risk coverage

63

o Discount facilities
o Less interest charges
o Provides advance facilities
 ICICI Bank are mostly satisfied their customer than other banks.
 Most of the cosumers are rated satisfied on the functions provided by the ICICI
Bank.
 They mainly focus on the fulfillment of their customer satisfactions and reduce
their burden.

QUESTIONNAIRE ON CREDIT CARD USAGE

NAME : INCOME :
AGE : OCCUPATION :

1. Name the bank of credit card which you are using?
a) ICICI bank b) HDFC bank c) SBI bank d) CITI bank

2. How long have you been using the credit card?
a)Less than one year b)One to two year c)Two to three year d) More than three
year

3. How many credit cards are u having?
a)One b)Two c)Three d)More than three

4. How did you came to know about this bank credit card ?

64

a)Self mode b)Bankers approach c)Relatives d)Advertisement

5. Do you want to be a credit card holder for life long ?
a)Yes b)No

6. Why do you prefer this bank credit card ?
a)Low interest rate b)Easy to handle c)More facilities and services are
provided d)More benefits to customer

7. The usage of credit card is more important
a)Strongly Agree b)Agree c)Disagree d)Strongly Disagree

8. Does credit card issued by your bank gives more security?
a) Strongly Agree b) Agree c)Disagree d)Strongly Disagree
9. Does the customer care personally respond you at all times?
a) Strongly Agree b) Agree c) Disagree d) Strongly Disagree
10. Credit cards will covers the risk

11. Is it your bank offers the credit holders an exiting range of prizes , special
discounts and privileges?
a)Strongly Agree b)Agree c)Disagree d) Strongly Disagree
12. Is your bank credit cards are accepted to pay for personal expenses?

13. Does your bank gives the proper records of the credit card, credit rate
calculations that are made ?
a)Strongly Agree b) Agree c) Disagree d) Strongly Disagree

14. Discount facilities are provided in more no. of expenses than other bank.

65

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