Cashless Society: A Study of Trends and Issues in Credit Card Industry in India

Abstract

A credit card has blessed and facilitated the middle class with the power to chase and often purchase their dreams, which are generally beyond their means. Credit card is the substitution of the currency at a time when the transaction of buying and selling takes place. One of the main reasons for this kind of substitution is the postponement of payment i.e. cash. Indian credit card industry has been changing consumer spending patterns. And, the credit card market in emerging economies has expanded rapidly in recent years. In India, the credit card business boomed in the 1990s.The number of credit cards in circulation has increased from 1.7 million in March 2006, to around 22.66 million by 31st March, 2010. The total expenditure through credit cards went up to Rs 584.46 billion during 2009-2010. The Indian credit cards industry is still in a relatively nascent stage when compared to those in western countries. In this backdrop, an attempt is made in this paper to critically examine the issues and challenges associated with Indian credit cards industry. Incidentally, this paper also analyses the role of RBI pertaining to Credit cards. Key Words: Credit Cards, Currency, Payment.

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