The Hindu Business Line : Credit card usage in India still low: Survey

THE Indian credit cards industry is still in a relatively nascent stage when compared to economies in West Asia, a survey by MasterCard International has found.

According to the survey results, only 14 per cent of Indians currently own a credit card. This is in sharp contrast to countries such as the United Arab Emirates and Kuwait where 63 per cent and 50 per cent of respondents, respectively, own a credit card. The results indicate the high growth potential for the payment card industry in India, the survey says.

It further finds that 73 per cent of Indians spend less than $35 on an average each month, while 25 per cent spend between $35 and $300. Only two per cent of Indians spend over $300 on their credit cards during a month. On the other hand, only six per cent of cardholders in the UAE have an average monthly spend below $35, whilst 58 per cent of cardholders in the UAE have an average monthly spend of over $300, MasterCard International's Consumer Lifestyle survey in the South Asia, Middle East and Africa Region (SAMEA) found.

The usage of credit cards by Indians is also much lower than their Asian counterparts. Seventy-two per cent of Indians use their credit cards 1-2 times (or less) a month, while 23 per cent of Indians use their cards between 3-5 times and the remaining 5 per cent use cards 6 times or more every month. In the UAE, 31 per cent of cardholders use their cards more than 10 times during a month, while only 15 per cent use their cards 1-2 times (or less).

Meanwhile in India, 44 per cent of cardholders use their credit cards most often for purchase of clothing, 14 per cent for supermarket/grocery shopping, 9 per cent at hotels and 6 per cent at restaurants. In the other six countries surveyed, the majority of cardholders use their card most often for supermarket/grocery shopping.

In terms of the single most important factor influencing choice of credit card, 30 per cent of

Indians say they are influenced by the credit card brand, closely followed by 23 per cent who choose a credit card depending on the credit limit. Interestingly, 8 per cent of cardholders say they are influenced by the card design, while only 5 per cent and 2 per cent cardholders say they are influenced by the interest rate and the bank staff recommendations respectively.

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