Pooja project on credit card (1)

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TO STUDY AND ANALYSE THE CUSTOMER
PERCEPTION TOWARDS CREDIT CARD ISSUED BY
PRIVATE AND PUBLIC BANK
Submitted in partial fulfilment of the requirement
For the award of the Degree of
Master of Business Administration
(2020- 2022)
(Dr. APJ AKTU Lucknow)
By
Pooja Gupta
Roll. No. 20GIMMBA080
MBA Semester 3rd
(GIMT, Greater Noida)
Report submitted to
Prof. Uzma

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Certificate
Certified that Ms. POOJA GUPTA, bearing Roll Number
2000940700052 of Dr. APJ Abdul Kalam Technical University,
Lucknow is a bonafide student of MBA 3rd Semester, at Galgotias
Institute of Management& Technology, GreaterNoida.
In partial of the requirement of the MBA program, she undertook a
project report (KMBN308), titled TO AND ANALYSE THE
CUSTOMER PERCEPTIONTOWARDSCREDIT CARD ISSUED
BY PRIVATE AND PUBLIC BANK
Faculty Guide HOD
Prof. Uzma Dr. Tariq Siddiqi
Department of Management Studies, GIMT

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Acknowledgement
I am using this opportunity to express my gratitude to Prof. Uzma who
supported me throughout the courseofthis MBA project. I am thankful for
her aspiring guidance, invaluably constructive criticism and friendly
advice during the project work. I am sincerely grateful to her for sharing
their truthful and illuminating views on a number of issues related to the
project and all the people who provided me with the facilities being
required and conductive conditions for my MBA project.

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CONTENTS
S No Topic Page No
1 Certificate 2
2 Acknowledgement 3
3 Executive Summary 5-8
4 Chapter-1: Introduction 9-34
5 Objective andScope 35/36
6 Methodology 37
7 Chapter-2: Literature Review 38-41
8 Chapter-3: Data Presentation&Analysis 42-48
9 Chapter-4: Summary and Conclusions 44-56
10 Chapter-5: Recommendations 52-59
11 References/Bibliography 60
12 Appendices/Annexure 61

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EXECUTIVE SUMMARY
The expectations of the customer from credit cards are very high as they expect credit
cards to generate ease of payment, payment protection, security and rewards.
Accomplished Study has been helping us to understand the intricacies and implications
of the relationship that exist between usage of credit card and customer satisfaction.
While credit card issuing has historically provided substantial revenues to financial
services providers, recent changes in a variety of consumer behaviors-including a
continued shift towards debit cards and growing adoption of prepaid cards-are creating
a more challenging revenue environment. Issuers must devise a strategy that manages
and secures the consumer transition towards debit card, while educating them on the
continued benefits of having an ever essential credit card, quintessentially a debt
instrument. All these challenges and more were the reasons that attracted the researcher
towards selecting this topic. Especially in a competitive market like India where lot of
similar offerings are made available and the presence of large expatriate population
who are willing to accept credit cards to safeguard their savings add more dynamism to
the market.
This doctoral research work shows consumers still feel threatened by credit cards. The
primary reason is the fear of overspending, threat of high rate of interest along with
variety of hidden charges accompanying the use of credit card. The credit card is looked
upon more as a status symbol and a sign of extravagance than a convenience tool or an
alternative mode of payment.
The completed research started with the following basic objectives:-
1) To understand the trends in Cards Industry in India.

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2) To find the consumer perception and state reasons for differences if any.
3) To study the satisfaction level for current card holders with present market offerings
in India.
4) To do a comparative analysis for private, Islamic, international and nationalized bank
cards available in India.
The extended objective was to have an understanding of the credit card industry in India
and identify the various credit card providers and the services provided by them
furthermore to know the perception of consumer towards the various services.
The research included the following stages so as to help attain the underlying
objectives:
1) To design a questionnaire to ascertain the perception of consumers towards various
features of credit cards provided by banks.
2) To conduct some unstructured interviews within Delhi as well as to meet some of
the bank officials so as to feel the nerve of the industry as well as to understand the
products being offered in a better manner along with attaining more in-depth
understanding about card issuers and the process of decoding consumer mind set about
credit cards.
3) To determine the attributes of various credit cards. Moving on to sample design the
sample size was 360 (Covering people from both the genders, diverse occupations and
across different nationalities, dissimilar age groups including students, businessmen,
and professionals’ domestic area of United Arab Emirates.

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Primary data was collected through unstructured interviews and informal meetings
(Phase I) Questionnaire were used for conducting survey and Secondary data was
collected through Annual Reports Magazines, Newspaper, Books, journals and
Websites (Phase II). The source of analysis is the data provided by the questionnaires.
Then a comparative analysis is done in order to determine perceptions of credit card
services provided.
The basic objective behind the selection of the sample was to have a perception of
consumers with different interest, so as to have a holistic view of consumers with in
India. Occupation helps in understanding what kind of a card would the consumer opt
for and his usage pattern. In case of Businessmen they generally own credit cards with
higher credit limits, whereas the student would go for a debit card due to non regular
income, or less income stream. And service people prefer cards with no frills and
benefits and longer credit periods.
The Survey results revealed the following:
1. The respondents own cards from different providers & there is a high increase in the
usage of cards..
2. The income level is scattered across different income levels.
3. The respondents recognized the following facilities that are provided by these banks?
Discount respondents showed some consumer priority for it, closely followed by
insurance auto alerts, rewards, etc. These emerged as some of the key factors which
help in attracting customers by providing value added facilities.
Some of the preferred reasons to change an existing credit card or top opt for a new one
has emerged as –

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Low credit limit,
Location of Branch / ATM,
Facilities provided, like special affinity cards, rewards,
discounts, insurance benefits (family insurance, hospitalization benefit, baggage
insurance), value for money cards,
Wide Acceptance of cards,
Online purchase and
Net banking.
Wide Number of ATM'S,
Long credit period
Low Penalty charges
Best Quality 24X7 customer support.
Chapter – 1

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Introduction
Credit cards have become popular from past few years in Indian market as almost all
the commercial banks came with the concept of credit cards. All the working employees
and self-employed who have the regular monthly income are eligible to get a credit
card. Credit card is a plastic-card issued by a bank or non-banking financial company
(NBFC) ready to lend money (give credit) to its customer. Credit card is a suitable
alternative for cash payment or credit payment or deferred (installment) payment. It is
used to execute those transactions which are compiled through electronic devices like
a card swapping machine, computer with internet facility, etc. Cardholder is someone
to whom a card is issued and who has an obligation to remit all necessary financial
borrowings made on his card. Multinational banks operating in India have also joined
the bandwagon with high voltage advertising and seemingly competitive reward
programmes for loyal credit card users. Bank’s income from credit cards can be divided
mainly into four components namely annual fee, interchange charge, revolving fee
(interest charged for revolving credit) and other fees. Indian credit card market is
growing at almost 30 to 40 per cent annually and the number of credit cards in
circulation is twenty seven and half million as reported by credit card issuers.A credit
card offers the customers with a lot of flexibility and saves time too. It is appropriate to
study the cardholders’ perception towards the credit cards issued by private bank and
public bank. Hence, the present study was formulated with specific objectives to
appraise and compare the cardholders’ perception scenario in the Public Sector Banks
and Private Sector Banks.
On February 28, 1950 – A Diners club card, the first multiuse credit card was issued.
This marked the beginning of the era of plastic money. Diner’s card was launched in

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the Indian market in 1960. The Central Bank of India was the first bank in the country
to introduce credit card system in August 1980, followed by several other banks. In
India, both foreign and Indian banks are doing credit card business. The foreign banks
have a dominant share due to various reasons like having been in the field for decades,
sound operational and financial strength, strong brand reorganization etc. Later, with
the aggressive entry of SBI, ICICI, and HDFC Banks the rules of the game changed.
Among the banks issuing credit cards, the esteemed and well published cards are
Citibank Diner’s Club Card, Citibank Visa Card and Credit Cards, Bank of Baroda’s
Master Cards, the SBI Credit Cards, Bank of India’s India Card, CanaraBank’s Can
Card and ICICI Ban’s ICICI Card. These cards are positioned in a manner which gives
an impression that the cards can be acquired by people from not only the upper class
but also the middle income categories. The new private sector banks like ICICI and
HDFC have adopted a strategy of reaching lower down the income strata by lowering
down their eligibility norms. Today credit card industry is highly competitive and
almost all the banks are offering credit cards in association with Visa International or
Master Card
History and development of credit card
As far back as the late 1800s, consumers and merchants exchanged goods through the
concept of credit, using credit coins and charge plates as currency. It was not until about
half a century ago that plastic payments as we know them today became a way of life.
The most common pre-plastic credit instruments were charge plates, celluloid “coins”
and charge coins. The concept of using a card for purchases was described in 1887 by
Edward Bellamy in his Utopian novel Looking Backward. Bellamy used the term credit
card eleven times in his novel. In the early 1900s, oil companies and department stores

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issued their own proprietary cards. Such cards were accepted only at the business that
issued the card and in limited locations. While modern credit cards are mainly used for
convenience, these predecessor cards were developed as a means of creating customer
loyalty and improving customer service. The modern 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 accepting each other's cards. Western Union had begun
issuing charge cards to its frequent customers in 1914. Some charge cards were printed
on paper card stock, but were easily counterfeited. The Charga-Plate was an early
predecessor to the credit card and used during the 1930s and late 1940s. Charga-Plate
was a trademark of Farrington Manufacturing Co. Charga-Plates was issued by large-
scale merchants to their regular customers, much like department store credit cards of
to-day. The first bank card, named "Charg-It," was introduced in 1946 by John Biggins,
a banker in Brooklyn. When a customer used it for a purchase, the bill was forwarded
to Biggins' bank. The bank reimbursed the merchant and obtained payment from the
customer. Purchases could only be made locally, and “Charg-It” cardholders had to
have an account at Biggins' bank. In 1951, the first bank credit card appeared in New
York's Franklin National Bank for loan customers. It also could be used only by the
bank account holders. The concept of paying different merchants using the same card
was invented in 1950 by Ralph Schneider and Frank X. McNamara, founders of Diners
Club, 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,
and required the entire bill to be paid with each statement. That was followed by Carte
Blanche and in 1958 by American Express which created a worldwide credit card
network. The Bank of America created the Bank Ameri card in 1958, a product which,
with its overseas affiliates, eventually evolved into the Visa system. MasterCard came

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to being in 1966 when a group of credit-issuing banks established Master Charge. It
received a significant boost when Citibank merged its proprietary ‘Everything Card’,
launched in 1967, into Master Charge in 1969. The fractured nature of the U.S. banking
system meant that credit cards became an effective way for those who were traveling
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
the U.S. 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.
Features ofcredit cards
The features of modern credit cards such as owner identification, credit limit for its
cardholders and floor limit for its merchant establishments, convenience and safety to
add value of cards, wider usage or popularity all over the world and dependence on
technology to keep operating cost to the minimum, have been a runaway success for
credit cards.116 Along with convenient, accessible credit, credit cards offer consumers
an easy way to track expenses, which is necessary for both monitoring personal
expenditures and the tracking of work-related expenses for taxation and reimbursement.
Credit cards are accepted worldwide, and are available with a large variety of credit
limits, repayment arrangement, and other perks (such as rewards schemes in which
points earned by purchasing goods with the card can be redeemed for further goods and
services or credit card cash back). Some countries, such as the United States, the United
Kingdom, and France, limit the amount for which a consumer can be held liable due to
fraudulent transactions as a result of a consumer's credit card being lost or stolen. A

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credit card is part of a system of payments named after the small plastic card issued to
users of the system. The issuer of the card grants a line of credit to the consumer (or the
user) from which the user can borrow money for payment to a merchant or as a cash
advance to the user. A credit card is different from a charge card, which requires the
balance to be paid in full each month. In contrast, credit cards allow the consumers to
'revolve' their balance, at the cost of having interest charged. Most credit cards are
issued by local banks or credit unions, and have the same shape and size, as specified
by the ISO 7810 standard.
Evolution and growth of credit card
The number of credit and debit card users in India is climbing fast, and rising affluence
is likely to erode Indians’ lingering reluctance to spend on credit. Indians have
traditionally valued thrift and frugality. But the spread of affluence in the wake of rapid
economic growth is challenging these values, at least for many middle-class and high-
income families. One sign of this is the phenomenal growth in the number of credit and
debit cards in India—in the past three years, the number of credit cards has more than
doubled and the number of debit cards has almost quadrupled. Credits cards are a
relatively recent development. The VISA Company, for example, traces its history back
to 1958 when the Bank of America began its Bank Americard program. In the mid-
1960s, the Bank of America began to license banks in the United States the rights to
issue its special Bank Americards. In 1977 the name Visa was adopted internationally
to cover all these cards. VISA became the first credit card to be recognized worldwide.
Credit cards are relatively new to India. Andhra Bank and Central Bank of India
introduced credit cards in 1981. As of now there are about more than dozen major banks
in Indian and foreign which have entered this line of business, besides some non-

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banking institutions. Since the plastic money has become as good as legal tender more
people are using them in their day-to-day activities. The attitude of people towards
credit cards has changed. A phenomenal amount of money moves get transacted
nowadays through electronic transfer, credit cards and debit cards. The Indian credit
card market is in its growth phase, it recorded a growth of about 30 per cent a year.
Debit cards are growing at 40 per cent. The RBI data put total electronic transaction in
the country at over Rs.2,35,000crores in 2006-07. This increased to Rs.3,60,000crores
in the first 10 months (April-January) of 2007-08. At the end of April-January 2007-
08, all of us together held about 27.5 million credit cards transacted Rs.47,476crores
through these cards in 10 months of the year.119 The Indian credit cards industry is still
in a relatively nascent stage when compared to economies in West Asia, a survey by
Master Card International. 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 that the high growth potential for
the payment card industry in India, 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.
Drivers of growth in card payment market

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Several factors have combined to fuel the astonishing growth in the use of credit and
debit cards in India. Apart from the convenience offered by cards, these factors include
the following:
(a) Rising consumerism
(b) Improved payment infrastructure
(c) Competition and lower costs
(d) Co-branding.
Credit card outstanding rising in India
The outstanding on plastic cards has risen by more than 50 per cent to Rs 19,345 crores
as on February 15, 2008 according to the RBI. The credit card industry in India is still
nascent according to VISA. Indians make just 1 per cent of their total purchases by
credit cards against 20 per cent by Koreans. The global average is around 9 per cent.
The Indian Credit Card market is expected to touch 55 million cards by 2010-2011.
Indian credit card user base grows 30%YoY
India had just 3.5 million credit cards in 2000. As of March-2006, the number has
swelled to 19 million, by January 2007 there were 22 million credit cards in India at the
end of April-March 2007-08, all together held about 28 million credit cards and Indian
had already transacted Rs.56,846crores through these cards in the year. It represents the
average growth of 30 per cent yearly. Not just the number of users have increased, but
also the average spending has gone up from $368 (Rs.16,560) in 2000 to $437
(Rs.19,665) in 2006 and in 2007-08 to Rs.56,846 crores.
SBI to increase co-branding credit business

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SBI card which is a subsidiary of the State Bank of India and operating as an NBFC is
exploring the option of tying up with regional banks to expand its national footprint.
SBI card has forged alliance with United Bank of India and Catholic Syrian Bank, as
first step in this direction. It also has alliance with the Indian Railways, Tatas, Hero
Honda for co-branded. The credit card industry in India is growing annually at the rate
of 30 per cent, while SBI has been growing at the rate of 45 per cent. SBI is one of the
big players of credit cards in India with 3.6 million customers.
Majorbanks issuing credit card in India
The major credit card issuers in India are as follows:
1. ABN AMRO credit card
2. HDFC credit card
3. Andhra Bank card
4. HSBC bank card
5. Axis Bank Credit cards
6. ICICI credit card
7. Bank of Baroda credit card or BoB credit card
8. Indian Overseas Bank card
9. Bank of India card 15. Stand Chart credit card
10. Barclays Bank credit card.
11. State Bank of India credit card (SBI credit card)

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12. Canara Bank card
13. Syndicate bank card
14. Central Bank of India card
15. Union Bank card
16. CITI Bank card
17. Vijaya bank card
18. Corporation Bank card
Big players in India’s credit card industry
ICICI Bank leads the pack with a 30 per cent market share and has issued 5 million
credit cards by the end of March 2006. At present upto March 2008, ICICI Bank is the
largest credit card provider in the country with 9 million credit cards, has shown a
growth of around 20-22 per cent, lower than the average growth of 30 per cent it has
seen in the past three years. HDFC Bank (after merger with Centurion Bank of Punjab)
has become the second largest credit card issuer in India beating Citibank and SBI-GE
Money in the race. HDFC Bank now has a base of 4.3 million credit card customers
while CITI India has around 3.4 million and SBI-GE Capital have around 3.6 million
customers at the end of FY 2008. HSBC credit card base 3.5 m by 31 March 2008.
ICICI Bank, HDFC, HSBC, SBI and Citi Bank have over 80 per cent share of the Indian
credit card industry.
India’s credit card industry

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HDFC Bank is set to be the first issuer in the country to cross 1 crore credit cards. The
bank has over 88 lakh cards as of end-May 2017 and is adding three lakh new customers
every month, which will enable it cross the 1-crore mark by end of 2017.
According to ParagRao, group head for marketing (credit cards and payments business)
at HDFC Bank, the card business has grown at a much faster pace after demonetisation.
Mr. Rao said that, the current run rate is around three lakh cards every month, which is
50-60% more than the next highest. During the demonetization period, debit card
volumes rose three times while credit cards grew at little over 20%. It was widely felt
that debit card transactions would overshadow credit. The share of credit card spending,
which had fallen to 40% of total card spend after demonetization, has again risen to
49%, according to RBI number for May 2017.Rao said that, they have seen similar
developments in South Africa and Brazil. While debit card transactions have grown and
a new normal has been created in usage, what we are seeing is that credit cards have
regained after a lag. He added that as customers got acquainted with debit card
transactions, they realised that they could buy now and pay later by switching to credit
cards. According to Rao, while the bank continues to follow its existing strategy of
focusing on internal customers, its underwriting methods have become more
sophisticated and there is a growing number of new customers coming in from the
digital platform. They are over 11 million users under the PayZapp app and half of them
are from the open market. We have their transaction history and can issue them credit
cards, Mr. Rao said that While card issuance is on the rise, transactions are also
expected to grow. He added that Compliance to the Goods and Services tax will throw
up new opportunities, Mr. Rao said that As shopkeepers get tax-compliant and start
using technology for accounting and payments, they would be more inclined to accept
electronic payments. The creation of the Bharat Bill Payments platform, which enables

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bank customers to pay bills from any banking platform, is also expected to lead to
increased card usage.
Basedon Franchise / Tie-up
(a) 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, Citicard.
(b) 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
Corporation of the USA. The franchised cards will be honoured in the MasterCard
network.
(c) VISA Card: This type of credit card can be issued by any bank having tie-up with
VISA International Corporation, USA. The banks that issue such cards are said to have
a franchise of VISA International. The advantage of a VISA franchise is that one can
avail the facility of the VISA network for transactions.
(d) Domestic tie-up Card: These cards are issued by a bank having a tie-up with
domestic card brands such as CanCard and Indcard are called ‘Domestic cards’.
Basedon geographicalvalidity
(a) Domestic Card: Cards that are valid only in India and Nepal are called ‘domestic
cards’. They are issued by most of the banks in India all transactions will be in rupees.

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(b) International and Global Card: Credit cards with international validity are called
‘international cards’. They are issued to people who travel abroad frequently. They are
honoured in every part of the world except India and Nepal. The cardholder can make
purchases in foreign currencies subject to RBI sanction and FERA rules and
regulations.
Basedon the issuer category.
(a) Individual Card: These are the non-corporate credit cards that are issued to
individuals. Generally, all brands of credit cards are issued to individuals.
(b) Corporate Card: They are credit cards issued to corporate and business firms. The
executives and top officials of the firms use them. They bear the names of the firms,
and the bills are paid by the firms.
Basedon mode of credit recovery
(a) Revolving Card: This type of credit card is based on the revolving credit principle.
A credit limit is fixed 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.
(b) Charge Card: A charge card is not a credit instrument, it is a convenient mode of
making payment. This facility gives a consolidated for a specific periods and bills are
payable in full on presentation. There is neither interest liability nor no per-set spending
limits.
Basedon status of Card

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(a) Standard Card: Credit cards that are regularly issued by all card-issuing banks are
called ‘standard cards’. With these cards, it is possible for a cardholder to make
purchases without having to pay cash immediately. They however, offer only limited
privileges to cardholders. Some banks issue standard cards under the Brand name
“Classic” cards, which are generally issued to salaried people.
(b) 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. They enjoy higher credit limits and more
privileges than the standard cards.
(c) Gold Card: The gold card offers high value credit for elite. It offers many additional
benefits and facilities such as higher credit limits, more cash advance limits that are not
available with the standard or the executive cards.
Innovative card
In addition, credit cards which have evolved into a variety of innovative cards over the
years are also issued by banks.
(a)ATM Card: ATM cards allow customers to access their accounts at any time-24
hours a day, every day of the year, through Automated Teller Machines. Customers can
withdraw cash, transfer funds, find out their account balance and perform other banking
and financial transactions with the help of ATMs.
(b) Debit Card: A debit card, like an ATM card, directly accesses a customer’s account.
It is a hybrid of ATM and credit card. The card directly debits a designated savings
bank account. Whereas in the case of credit cards, a grace credit period of 20 to 50 days
for making the payment is available, no such credit period is allowed under debit cards.

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These cards can be used either at merchant locations who have this facility to buy goods
and services or at ATMs. Presently, ATM-Cum Debit cards issued by Indian banks are
in use.
(c) Prepaid Card: Prepaid cards are also known as ‘Stored Value Cards’. These cards
are with stored value paid in advance by the holder. The card issuer and the service
provider are identical. They are also called Limited Purpose Prepaid Cards which can
be used for a limited number of well -defined purposes. Its use is often restricted to a
number of identified points of sales within a specified location
(d) Private Label Card: These cards are uniquely tied to the retailer issuing the card and
can be used only in that retailer’s stores. A bank, on the basis of a contractual agreement
with the retailer extends credit under this type of card.
(e) Affinity Group Card: These are credit cards designed for a collection of individuals
with some form of common interest or relationship, such as professional, alumni, retired
persons’ organizations, sports teams, schools, or service organizations. This credit card
carries the logo of the affiliated organization on the card design and brings special
benefits and discounts on products from that company. In case the affiliated company
is a charity or non-profit organization, a part of the credit card expenses go into the
affiliate organization's account. For example: The Help Age India Credit Card issued
by ICICI bank.
(f) Smart Card: A smart card is a credit card sized plastic card with an embedded
computer chip. The chip allows the card to carry a much greater amount of information
than a magnetic strip card. The telecom industry, was perhaps the pioneer in smart
cards, the most prominent being Subscriber Identity Module (SIM) cards in the GMS
digital cellular network. Using special terminals designated to interact with the

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embedded chip, the card can perform special functions. This is essentially a prepaid
card.
(g) Chip Card: A chip card is a plastic card with an embedded integrated circuit or as
microchip as opposed to magnetic strips on a conventional card. The chip can be used
on existing debit and credit cards as well as on emerging products like stored value
cards. Inserting the card in a pin-pad effects the transaction, and the value on it reduces
accordingly. It is re-loadable and disposable. The idea is to do away with the trouble of
carrying cash. The chip card also scores over the magnetic card, in that it can retain 50
to 60 of the latest transactions, which can be produced on demand. It is also considered
more durable and secure since the cardholder alone can access it through a Personal
Identification Number (PIN).
(h) Co-branded card:The Times Card, a co-branded credit card, is the first of its kind,
from a publishing house in the Asian subcontinent. This is a cobranded credit card of
Times of India Group and Citibank MasterCard. The co-branding concept caught the
credit card industry the world over during the last five years.
launched the first ‘women only’ card, ‘My card’ in the year 1988. A highly encouraging
membership and increasing potential of such special purpose cards are called “Lady’s
card” in Malaysia. In 1990, the Green card was launched in the U.K and
Credit card Operationcycle
The credit card operation comprises the following steps as follows:
(a) Credit purchases: A Cardholder purchases goods/services and gives the credit card.

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(b) Processing of credit card: A Merchant establishment delivers goods after taking an
authenticated credit card and noting the number and taking signatures on certain forms.
(c) Raising of bill: The Merchant establishment raises the bill for the purchase and
sends it to the credit card issuing bank for payment. I
(d) Marking payment: The issuing bank pays the amount to the merchant establishment.
(e) Bill to cardholder: The issuing bank raises bill on the credit cardholder and sends it
for payment.
(f) Card Payment: The credit cardholder makes the payment to the issuing bank.
Global player in credit card market
(a)MasterCard: MasterCard is a product of MasterCard International and along with
VISA is distributed by financial institutions around the world. Cardholders borrow
money against a line of credit and pay it back with interest if the balance is carried over
from month to month. Its products are issued by 25,000 financial institutions in 220
countries and territories. In 1998, it had almost 700 million cards in circulation, whose
users spent $650 billion in more than 16.2 million locations. The company, which had
been organized as a cooperative of banks, had an initial public offering on May 25,
2006 at $39.00 USD. The stock is traded on the NYSE under the symbol MA.
(b)VISA card: A VISA card is a product of VISA USA and along with Master Card is
distributed by financial institutions around the world. Visa Inc. commonly referred to
as VISA, is a multinational corporation based in San Francisco, California, USA. The
company operates the world's largest retail electronic payment network, managing
payments among financial institutions, merchants, consumers, businesses and
government entities. Before Visa Inc's IPO in early 2008, it was operated as a

25
cooperative of some 21,000 financial institutions that issued and marketed Visa
products including credit and debit cards. A VISA cardholder borrows money against
a credit line and repays the money with interest if the balance is carried over from month
to month in a revolving line of credit. Nearly 600 million cards carry one of the VISA
brands and more than 14 million locations accept them.
(c)American Express: The world’s favourite card is American Express Credit Card.
More than 57 million cards are in circulation and growing and it is still growing further.
Around US $ 123 billion was spent last year through American Express Cards and it is
poised to be the world’s no.1 card in the near future. In a regressive US economy last
year, the total amount spent on American Express cards rose by 4 percent. They are
very popular in the U.S., Canada, Europe and Asia and are used widely in the retail and
everyday expenses segment.
(d)Diners Club International: Diners Club International, originally founded as Diners
Club, is a charge card company formed in 1950 by Frank X. McNamara, Ralph
Schneider and Casey R. Taylor. When it first emerged, it became the first independent
credit card company in the world. Diners Club is the world's no.1 Charge Card. Diners
Club cardholders reside all over the world and the Diners Card is all time favorite for
corporate. There are more than 8 million Diners Club cardholders around the world.
They are affluent and are frequent travelers in premier businesses and institutions,
including Fortune 500 companies and leading global corporations. In April 2008,
Discover Card and Citibank announced that Discover would purchase the Diners Club
Network from Citi for $165 million. Discover Bank has no plans on issuing Diners Club
branded cards. Discover purchased the network, but not the licensees issuing the cards.
The deal was completed on July 1, 2008.

26
(e)Discover Card: The Discover Card was originally introduced by Sears in 1985, and
was a unit of Dean Witter, which merged with Morgan Stanley in 1997. In 2007, the
unit was spunoff as an independent, publicly traded company. To-day, Discover is
headquartered in the Chicago suburb of Riverwoods, IIinois. Discover Financial
Services is an American financial services company, which issues the Discover Card
and operates the Discover and Pulse networks. Discover Card is the third largest credit
card brand in the United States, when measured by cards in force, with nearly 50 million
cardholder.
(f)CB Card (Japan Credit Bureau): Japan Credit Bureau, usually abbreviated as JCB, is
a credit card company based in Tokyo, Japan. Founded in 1961, it established
dominance over the Japanese credit card market when it purchased Osaka Credit
Bureau in 1968 and its cards are now issued in 20 different countries. Fifty-nine million
JCB card members worldwide use their cards to purchase over US$62.7 billion of goods
and services annually in 190 countries worldwide. JCB also operates a network of
membership lounges targeting Japanese, Chinese, and Korean travelers in Europe, Asia,
and North America. The JCB philosophy of “identify the customer’s needs and please
the customer with service from the Heart” is paying rich dividends as their customers
spend US$ 43 billion annually on their JCB cards.
Marketing of credit cards
Marketing is a business term referring to the promotion of products, especially
advertising and branding. The term developed from the original meaning which referred
literally to going to market, as in shopping, or going to a market to sell goods or
services. Customer satisfaction is the key concept of any marketing like credit cards. It
is rightly pointed out by Mahatma Gandhiji, “A Customer is the most important visitor

27
of our premises. He is not dependent on us. We are dependent on him. He is not the
interruption to our work. He is the purpose of it. He is not an outsider to our business.
He is part of it .We are not doing a favour by serving him. He is doing us a favour by
giving an opportunity to do so.” It is a sad commentary on our banks that they either do
not find time to take customers seriously or lack to carry out customer survey. Banks
should adopt a marketing approach stating the philosophy. “Customer is the king” let’s
find about him and serve him – How do we do that? By satisfying his needs .
The concept of marketing is customer satisfaction, it includes identifying the most
profitable market at present and in future, assessing present and future needs of
customers, setting business development goals and making plans to meet them, and
managing the various services and promoting them to achieve the plans. In this
background, the researcher conducted a survey on the credit cardholder’s satisfactions
among the banks in this study area. The satisfaction can be tested by way of product
awareness, level of satisfactions and dissatisfaction, problems perceived by them. This
study has also been assessed for shifting options given by the users among the banks in
this area. This research will help the banks to market their credit cards and aim to
improve their sales by enhancing the usage of cards among the existing cardholders and
also attracting new users by way of successful marketing of their products.
Credit card Services in India
Indian credit card market is growing upwards due to the global business environment.
This is not only new but also benefit to the existing and new cardholders by giving the
important innovative services offered under the following heads:
(a)Merchant establishment services: Wider acceptance of credit cards, discount facility
offered to the customers and quick processing of transactions for the credit cardholder

28
is the important services made by the merchant establishment at their PoS. Credit cards
give the cardholders the facility of anytime cash and convenience of using it anywhere
in the world and a whole bunch of benefits. These benefits range from lifetime free
cards, Global emergency assistance service, discounts, utility payments, Travel
discounts and a lot more. Bank Credit Cards Special Offers include payment in monthly
EMIs on their Credit Card, Family Plus - a complete insurance plan that is flexible
enough to cover every member of the family. Heavy Discounts, Best Shopping Deals
Ever, Exclusively for Bank Credit Card Holders. Banks Gold Cards are welcomed at
all Merchant Establishments displaying the VISA logo - over 1,10,000 and MasterCard
logo - over 77,000 establishments across India and Nepal and the Silver and Gold Cards
are accepted globally by over 22 million VISA Card and 22 million MasterCard
accepting establishments.
(b)Insurance services: Once own a credit card, there are some insurance benefits
available to us who come along with the newly-issued credit card, we will find an
insurance company that is offering various kinds of covers. The best part is that the
insurance company pays for these covers by purchasing group insurance schemes. The
insurance benefits include the following are :
(i) Credit insurance
(ii) Personal accident insurance
(iii) Lost baggage insurance
(iv) Purchase protection
(v) Health insurance
(vi) Protection Plus

29
(vii) Credit Shield.
(c)Convenience Services:The following important credit card services are more
convenient for the use of credit cardholders such as:
(d)Auto Debit facility: If credit card customers have an account with any bank branch,
the bank provides the cardholders the added convenience of paying their bills (either
the Minimum Amount Due or the Total Amount Due) directly through their bank
account. It offers cardholders for convenience and bank can save the effort of issuing a
cheque every month towards payment of credit card dues. Cardholders can pay their
credit card dues directly from his account, but need to authorize the bank to claim the
amount directly from their bank account every month and bank will credit his card
account on the payment due date. All additional facilities is provided free of cost.
(e)Payment options: Cash/Cheque/Draft/Phone/ATM /Internet The following are
important credit cards payments services: i. Cash payment: The credit cardholders of
the respective banks may deposit cash towards their credit card payment at any of their
bank branches. The payment would reflect in their account within 24 hours. At present,
banks cash payment of credit card bills entails a service charge per payment. For
example ICICI bank charges Rs.100 per payment. Bankers are advised to inform
sufficiently in advance to avoid late payment charge and interest charge.
(f)Cheque/Draft/Phone/ATM: Bank cheques will take three days for clearance.
Cardholders are advised to drop cheques/drafts well in advance to avoid any late
payment charge and interest charge. They may even pay over the phone if they hold a
savings account with the credit card bank, by calling at any of their 24-hour customer
care numbers. It will take three business days for the payment to reflect in their credit
card account. Presently, payment through ATM accessible for some banks, for example

30
SBI cardholders can make credit card payment due through their ATM centres across
the country.
(g) Internet: Cardholders can have online payment through savings accounts, go to
Bank website and transfer funds from his savings account to credit card account using
bill pay facility. If a cardholder do not have a savings account payment through net
banking. And another important mode of payment if customer have an account with
any Bank branch, can make payment of their monthly credit-card bill (either the
minimum amount due or the total amount due) by direct debit to concerned bank
account.
(h)Email statement: Statement Online is a very simple, powerful and convenient way
to access our Credit Card statement details instantly without any postal delays. Simply
sign up for Statement Online and get faster, reliable access to our account statement.
(i)Mobile alerts: Mobile alerts from Bank provide us with information about bank
Credit Card even when the cardholders are on the move. This service provides with
information about Bank Credit Card account. Customers would now no longer miss a
payment or exhaust Credit limit without a warning. Currently, customers having credit
card account can subscribe to the following alerts. (i) Due date remainder and (ii)
Approaching credit limit and payment received alert reminder.
(j)Transact on line :Enjoy the freedom and convenience of anywhere, anytime banking
with “Bank Internet Banking” services, the range of online services available to the
credit card customers to secure access to information on Credit Card transactions on the
web. The following information can be accessed online: Account information - current
and last statement, Payment status, Monthly statement by email, request for a duplicate
PIN Record, a change of address, Dial a draft, Auto debit, request for a replacement

31
Card, Request for an “Add-on” Card, apply for an add-on Card, Access and redeem
online from the Rewards point, subscribe to statement by e-mail, subscribe to e-mail
and mobile alerts.
Value added Services
The following are the important facilities give more value for the card and its
cardholders such as:
(a)Utility bill payment /Bill pay service:Utility bill payment /Bill pay service is simple,
convenient and secure way to pay utility bills such as electricity, telephone, insurance,
gas, and other payments by using Credit Cards. Some banks offering cash back and
waiver of charges. For example Barclays bank cards offers 10 per cent, Standard chart
cards offers 5 per cent cash back to their cardholders to pay utility bill through their
credit cards. The card issuers offering to the customer for tracking and paying multiple
bills service. The Bill Pay Service is a simple and convenient service through which we
can set up a Standing Instruction on Bank Credit Card for payment of their utility bills.
Simply enroll for Bill Pay service and leave where worries over bill payments to
bankers. This offers only to Visa- and MasterCard-holders.
(b)Balance transfer facility :Bank's Balance Transfer facility gives cardholders the
option of transferring outstanding balances from one banks card to any other bank's
credit card. It can enjoy an interest rate as low as 0 percent on the transferred amount
for 3 months option or 0.75 per cent rate of interest (9% p.a.) for 6 months, followed
by 1.49 per cent rate of interest (17.88% p.a.) after 6 months - This is the Life Time
Balance transfer option along with the zero documentation and speedy draft delivery
make the Bank Credit Card balance Transfer programme. To avail of Balance Transfer
customer should contact 24-hour Customer Care of the banks. This benefit of it to save

32
on interest cost, pay back in easy EMI of 6 months, 12 or 24 months. Banks reserves
the right to modify or change the balance transfer offering at any point of time within
the terms and conditions of bank balance transfer facility.
(c)Cash advance facility :Cash advances are convenient and easiest facility to draw cash
for the cardholders’ urgency. Banks in India charge a transaction fee as well as service
fee / interest charge on cash advances. This service fee accrues from the date of the
advance (as soon as they receive the cash) to the date of full payment. The charges vary
from banks to banks. Cash advance facility is a part of the overall credit limit assigned
to a cardholder. The limit is of cash advance is 30 percent to 40 percent of total credit
limit approved by the banks it may vary and is always lesser than the borrowing limit
or the credit limit.
(d)Dial-a-draft facility: In order a draft from the convenience of customers’ home or
office. The cardholders simply call their bank 24 hours Customers Care numbers and
ask for a draft, payable anywhere in India. If any company or individual can order a
draft up to the available cash limit on the cardholders account. The draft will be
delivered to the credit cardholders mailing address. For each draft request, a transaction
fee of 2.5 percent of the amount withdrawn, subject to a minimum of Rs. 300, will be
levied. In addition to the transaction fee, an interest charge will also be levied from the
date of Transaction to the date of repayment. The amount of the draft will be billed in
banks monthly Credit Card statement.
(e)EMI on Call :EMI-on-call gives credit cardholders the option to pay back credit card
purchases in easy installments. Now they can convert any credit card purchases of over
Rs. 2,000 into EMI-on-call with just a phone call, can avail of the EMI-on-call facility
instantly without submitting any documents. Simply call 24-hour customer care and put

33
request within 15 days of buying. The cardholders benefits are ease of repayment and
pay back in 6, 12, 18 or 24 months easy instalements, flat interest rate of 10 per cent
per annum. It may be subject to change and for selected customers.
(f)Express Rewards Programme: Under the new Xpress Rewards Programme, Credit
Cardholders spend more on this card greater are the rewards, For example ICICI Bank
Credit Cards Rewards Programme, is an exclusive initiative aim at rewarding customer
relationship with ICICI Bank. This is the widely accepted reward program in the
country that allows cardholders to earn up to 10 reward points for every Rs.200 spent
and redeem these points against exciting options. All we need to do is collect a
minimum of 500 points and start redeeming them for gifts, great benefits and services.
Generalservices
The following are the important general services which gain the more advantages to
cardholder convenience and for safety. They are separate card for the house wife,
automatic renewal of credit cards. No fee for the registration, renewal and annual,
online marketing services, Photo card .
Credit cards Credit card fraud is a wide-ranging term for theft or fraud committed
using a credit card or any similar payment mechanism as a fraudulent source of funds
in a transaction. The purpose may be to obtain goods without paying, or to obtain
unauthorized funds from an account. Credit card fraud is also an adjunct to identity
theft. The cost of credit card fraud reaches into billions of dollars annually. In 2004, the
cost of fraud is high in the UK; it was over £500 million. Fraud in the United Kingdom
alone was estimated at £500 million, or US$750-830 million at prevailing 2006
exchange rates.1options and signature digitally imprinted.

34
Stolen cards can be reported quickly by cardholders, but a compromised account can
be hoarded by a thief for weeks or months before any fraudulent use, making it difficult
to identify the source of the compromise. The card holder may not discover fraudule nt
use until receiving a billing statement, which may be delivered in frequently.
Objectives of study:
The main objectives of the present study are -
(a) To study the profile of credit cardholders.
(b) To study the awareness of bank customers about credit cards.
(c) To determine the factors influencing the usage of credit cards.
(d) To compare the attitude of customers towards credit card services.
(e) To assess the eligible credit limits and the actual credit limits availed by the card
holders.
(f) To examine the extent of usage of credit cards by card holders.
(g) To offer suggestions for further improvement.

35
Scope of study
The scope of the Banking services is vast and ever expanding. This present work
attempts to study the customer’s perception towards the credit cards.
The study is being carried out with a special reference to Public Sector Banks and
Private Sector Banks. It does not cover the Foreign Banks.

36
ResearchMethodology:
(a) Primary Data: The primary data has been collected from fine number of respondents
by having formal discussions and conducting online surveys.
(b) Secondary Data: Additional data has been collected from books, journals, online
materials and several other sources.
(c) Collection of Data: The primary data has been collected by conducting surveys with
varied questionnaire from the credit card holders. The interview schedule has been pre-
tested with randomly selected people before the actual collection of data.
(d) Plan of Analysis: To analyze and interpret the collected data, the researcher has used
tools like Percentages, Chi- Square Test and Garrett Ranking.

37
Chapter 2
Literature Review
Credit cards have become a major instrument for carrying out and financing purchases
among consumers. Furthermore, credit card debt has risen faster than household
disposable income, and raising concern among policy-makers. Increased borrowing on
credit cards to recover consumption spending is usually seen as a stimulating factor for
the economy. With the introduction of credit and debit cards has encourage the
consumers’ ability to maximize consumption decisions by providing them secure and
quick access to all of their funds on deposit or a line of credit. Sellers also benefit by
moving of less cash and cheque handling in the system as they have access to a large
pool of customers with guaranteed payment. Cards also play vital role in e-commerce,
with its inherent efficiencies. It is clear that credit cards play an important role in an
economy. This process is explained by Moody’s Report in 2016. They introduce
economic cycle which explains the process of continued economic growth that is
supported by credit cards. This shows that increased consumption due to increase in
usage of credit cards lead to increased output and finally it facilitates to decline of
unemployment in the economy. However, economists argue that high levels of debt
may curtail spending in the future and hence ultimately results in slow economic growth
(Moody’s Analytics, 2016
Credit cards, including store cards and bankcards, serve two distinct functions for
consumers: a means of payment and a source of credit (Ausubel 1991; Chakravorti
1997, 2000; Chakravorti and Emmons 2001; Slocum and Matthews 1970; Stavins
2000). Based on the main use of credit cards and the benefits sought, credit card users

38
can be segmented into two groups: convenience users and revolvers (Lee and Hogarth
1999). Convenience users tend to employ credit cards as an easy mode of payment;
typically pay their balance in full upon receiving the statement. Revolvers, on the other
hand, use the card principally as a mode of financing and chose to pay interest charges
on the unpaid balance. According to the consumer behavior literature, consumer usage
behavior and the benefits sought from a product or a service are one of the best
predictors to explain consumer purchase behavior (Peter and Olson 1999).
Credit cards also serve as an open-ended, easily available credit source ( Lee and Kwon
2002). When consumers use credit cards as a mode of financing, credit cards compete
with bank loans and other forms of financing (Brito and Hartley 1995). Credit cards
allow consumers to borrow within their credit limit without transaction costs, which
includes all the time and effort involved with obtaining a loan from a financial
institution. This convenience attracts many consumers to pay high interest on
outstanding credit card balances, rather than taking the time to apply for a loan with a
lower interest rate. As a result, credit cards account for a substantial and growing share
of consumers’ debt (Canner and Luckett 1992).
The popularity of credit cards as a payment medium has been attributed to the
convenience of not carrying cash and checks, the limited liability of lost/ stolen cards,
and additional enhancements, such as dispute resolution services and perks (i.e.,
frequent-use awards programs) (Chakravorti 1997, 2000; Chakravorti and Emmons
2001; Whitesell 1992). They are frequently used for convenience, telephone and
Internet transactions.
The behavior and the attitude of the consumer towards the use and acceptability of
credit cards differ for psychographic reasons (Yang, James and Lester 2005). Xiao,

39
Noring and Anderson (1995) devised a 38-item scale to measure affectiveness,
cognitive and behavioral attitudes towards credit cards. Affective attitudes involve
emotional feelings (e.g. My credit card makes me feel happy); cognitive attitudes
involve thoughts (e.g. Heavy use of credit cards results in heavy debt); while behavioral
attitudes involve actions (e.g. I use my credit card frequently). Many consumers value
uncollateralized credit lines for making purchases when they are illiquid (i.e. before
their incomes arrive), even at relatively high interest rates. Because of limited
alternatives to short-term uncollateralized credit, the demand for such credit may be
fairly in-elastic with respect to price (Brito and Hartley1995).
Ausubel (1991) suggests that consumers may not even consider the interest rate when
making purchases because they do not intend to borrow for an extended period when
they make purchases. However, they may change their minds when the bill arrives.
Stavins (1996) argues that consumers are somewhat sensitive not only to changes in the
interest rate but also to the value of other credit-card enhancements such as frequent-
use awards, expedited dispute resolution, extended warranties, and automobile rental
insurance. However, she agrees with Ausubel (1991), Calem and Mester (1995) that
lowering interest rates may attract less creditworthy consumers, therefore dissuading
some credit-card issuers from lowering their interest rates.
According to Jeans S. Bowers (1979) longitudinal study, low-income users of credit
cards tend to use the cards for the installment feature rather than for service features
such as convenience, safety, or identification. It has been suggested that the installment
feature of credit is needed by the low-income consumer to permit purchases such as
automobiles, furnishings, and other consumer durables.

40
Demographics also seem to play a vital role in making a choice and the use of credit
cards as a convenience user or revolver. Age, income level has been studied previously
and suggest some indication for correlation between demographic and use of credit
card. According to the study conducted by Jean Kinsey (1981) the probability of having
credit cards and the number held was correlated highly with age and occupation.
However, these two characteristics were less important than the place of residence, use
of checking and savings accounts, and attitude towards credit.

41
Chapter 3
Data Analysis and interpretation
Data Interpretation:
Online surveys were conducted with random set of people using set of questionnaires
to read perception of people regarding credit cards.
Attached is the pictorial representation of the same:

43
Interpretation
The demographic analysis was performed in order to capture some preliminary insights
of customer behaviour. It has been found that the sample was evenly distributed by
Gender i.e. 61.9% of the data were Males and 38.1% were Females. In terms of age
category, 60.7% were between 18- 25years, 20.2% were between 25-35 years, 7.1%
were between above 35-45,9.5% were above 45 years. It observed that the majority
number of respondents were in the range of between 18-25 years of occupation, the
least number of respondents are lawyer ,doctor and other consultants while the majority
of the respondents are student and engineer. Majority of consumer whose income is
below 50k (75.6%) while 16.7% respondents whose income is in between 50k – 1 lakh
and 6.4% are those whose income is more than 2lakh.
Fig 1. It can be observed that the majority number of respondents (39.7%)were manage
the food from order when meals are not cooked at home.38.5% respondents from
restaurants, and 21.8% buy ready to eat food pack when meals are not cooked at home

44
According to this figure majority of(43.9%) respondent are using one credit card. And
37.8% Respondent are not using credit card. and 11%respondent are using two credit
card. and 3.7% respondent are using three or more than three.
According to this figure36.1% respondent are using SBI credit cards and 24.6%are
using HDFC bank credit cards and 14.8% respondent are using axis bank credit cards.
And 11.5% respondent are using other bank cards.

45
According to this survey 48.4% respondent are using credit cards less than one year.
And 23.4% respondent are using credit card for a more than three year and 15.6%
respondent are using credit card for one to two year.
According to this survey respondent 33.9% are saying that secured online shopping
service is provided by credit card.25.8% are saying that cash in advance service is
provided by credit card 19.4% are saying that utility bill payment service provided by
credit cards.

46
We came to know through different ways like 42.6% by self mode,34.4% by bankers
apporoach,16.4% by relatives and 6.6% by advertisement.
We prefer this bank credit card due to following advantage and these are first 35.5%
easy to handle, second 29% more facilities and services are provided, third 14.5% more
benefits to customer and fourth 21% low interest rates.

47
From the following study we get to know the importance of using of credit card and the
customer said the following 53.5% are agree,28.2% strongly agree,9.9% disagree and
8.5% strongly disagree.
From the survey we conclude about the security is 56.3% is agree,39.1% strongly
agree,4.7% are disagree and 0% are strongly disagree.

48
From the survey we got to know about customer care response all the time is 61.2% is
agree,23.9% are strongly agree,10.4% are disagree and 4.5% strongly disagree.
From the survey we got to know about more advantages with the bank regarding bank
offer more than other credit card the prizes special discounts and privileges, we found
50.8% are agree,26.2% are strongly agree,14.8% are disagree and 8.2% strongly
disagree
From the following survey we got to know about providing proper records of the credit
card ,credit rate calculations ,customers says:-53.1% agree,35.9% strongly agree,7.8%
disagree and 3.1% strongly disagree.

49
The percentage drawback of other banks as compare to our bank signifies 30%
agree,20% disagree,9% are strongly agree and4% are strongly disagree.
According to this survey, 72% customers are ready to change credit card if the advance
facilities are offered by other bank and 27.7% customers are happy with credit card and
they did not change credit card.

50
According to this survey, 69.4% customers are satisfied with their credit card,21%
customers are highly satisfied with credit card ,4.8% respondent are dissatisfied and
highly dissatisfied with their bank credit card.

51
Chapter 4
Findings
Customer perception towards Credit Cards has observed from the analysis of bank
customers‟ awareness about credit cards that SBI credit cards are more popular which
followed is by CITY bank Card and HDFC bank Card. Can Card is found to be less
popular among the samples respondents. Regarding the source of information about
credit cards the respondents‟ revealed that the agents of ICICI bank were the source of
information about ICICI card. In the case for SBI Card, advertisements provided the
necessary knowledge and for HDFC cards, the bank was the source of necessary
information for the customers. Regarding the conditions and charges on credit cards,
majority (64%) are aware of the basic conditions and 76 percent of the respondents
know about the charges imposed on the services. Cash withdrawal facility on credit
cards is not known to majority (68%) of the respondents. None of the sampled
respondents have awareness about the interest free credit period. Majority (88%) of the
sampled non-holders of credit card are aware of the convenience in using credit cards,
reducing the risk of carrying cash (74%) and wider acceptance of the credit cards (67%).
Higher proportions of the respondents (79%) know about the ATM facility for cash
withdrawal. As regards demography and level of awareness, it is observed that age wise
majority of the middle aged (68%), gender wise - the male (73%), education wise- the
college educated (84%), occupation wise- the employed (67%), and income wise- the
higher income group (81%) have high level of awareness. High proportions of the low
awareness category comprised of those above 50 years old, female customers, school
educated category, agriculturists by occupation, and the low-income earners. Regarding
banking related profile of the respondents and their level of awareness, the study shows

52
that majority of the bank customers with long period of customer ship (72%), those
transacting more frequently with the bank (78%), those who have current account with
the bank (76%), and customers with larger balance in their account know more about
credit cards and their awareness level is found to be high. Low awareness category
comprised of more of customers with short period customer ship (64%), those
transacting less frequently (58%), fixed deposit account holders (68%), and customers
with smaller balance in their account (52%). Promotional measures through agents,
banks‟ services, advertisement and merchant establishments are the sources of
information and awareness providers for bank customers.
Determinants of Credit Limits
The eligible credit limits of majority (68%) of the respondents ranged from Rs.15,000
to Rs. 50,000. Credit limit actually availed were found to be ranging from Rs.15,000 to
Rs. 30,000 in the case of majority (54%) of the card holders. Correlation analysis
conducted to test the degree of relationship between the socioeconomic characteristics
of credit card holders and credit limit actually availed revealed that the credit limit
availed by the card holders is significantly and positively correlated with monthly
income of the card holders, their family size, and total family expenditure. The
implication is that higher the income, the family size, and the total expenditure, the
credit limit actually availed is on the higher side. The actual credit limit availed is
independent of the card holders occupation as well as education. Multiple regression
model used to find out the determinants of the credit limits availed by the credit card
holders indicated that card holders‟ income is the most
significant factor determining the actual credit limit availed by the card holder. This
variable explained the variation of the credit limit availed to the extent of 51.9%.

53
Attitude of Card Holders towards Credit cards
Attitudinal behavior of credit card holders determined based on „Fishbein‟s Attitude
Model‟ indicated that majority of the sampled credit card holders (71.20%) have
positive attitude towards credit cards. „Availability of emergency funds through credit
cards‟ and „shopping without paying cash immediately‟ contributed more towards the
positive attitude of card holders. However, 28.80 percent of the card holders have
negative attitude and higher rate of interest charged is the cause of this negative attitude.
Regarding the demographic and credit card related variables influencing card holders‟
attitude the logit analysis revealed that two variables namely credit card holders‟ family
income and eligible credit limit significantly influenced their attitude. This is
understandable in view of the economic conditions of the card holders.
Card Holders’ Perception and Experience
The analysis pertaining to card holders‟ perception and experience regarding the role
of core and supplementary service elements show that majority of the sampled credit
card holders (87.25%) consider credit cards as a convenient mode of payment and 90.75
% consumers carry the feeling of reduced risk of carrying cash and 96% consider
revolving credit in evaluating purchase of credit cards. Facilitating service of easy
acceptability procedure of credit cards at retail outlets is considered by majority
(92.75%) of the respondents while making purchase decisions of credit cards. Presence
of additional features (supporting services) of free insurance coverage and discounts
have not been strongly felt by majority (69.75% and 78.25%) of the card holders. Card
holders‟ experiences were very high regarding all the core services such as convenience
in payment (86.25%) reduced risk of carrying cash (92.75%) and revolving credit
facility (96.5%). Facilitating services of easy acceptability at retail outlets have also

54
been experienced by majority (94.50%) of the card holders. The importance of
supporting services of free insurance coverage and added discounts were not actually
experienced by majority (70.25% and 85.75%) of the card holders. Thus, the analysis
revealed that respondents considered basic benefits, facilitating services and supporting
services prior to purchase of credit cards. However, facilitating services were of low
consideration.
Chapter 5
Suggestions

55
Based on the findings of the study the following suggestions are made here:
Popularizing the Credit Cards Can Card is found to be less popular among the
respondents. Hence methods should be adopted to bring a higher degree of
popularization of this credit card through mass media channel like television, radio,
railway centers, and super markets with a pictorial review of the card facility.
Creating Awareness about Interest Free Credit Period: The most lucrative feature of a
credit card is the interest free credit period offered to card holders. Non holders of credit
cards are not aware of this benefit of credit cards. Hence awareness should be created
about this benefit of credit cards among the non-holders.
Direct Marketing: Credit card issuers, though offer international levels of service and
credit support to the card holders, have failed to make an impression among the less
educated and the agricultural category with middle level income. They also feel that the
cost of credit cards is high and therefore make it a status symbol rather than meeting
their needs. Hence, direct marketing by the banking clubbed with other services will be
helpful to impress this untapped segment.
Implementing Regulatory Measures: The credit limit availed by many card holders are
found to be less than their eligibility limits. The working group on regulatory
mechanism for credit cards has suggested measures aimed at encouraging card usage
in a safe and secure manner. This guideline should be implemented so that the entire
eligible credit limit may be availed by the card holders.
Extending Incentives to all Types of Cards: Despite more widespread usage, most of
the credit card users are the more educated with professional types of jobs and high
income earners. Most of the card holder incentives are offered for high value cards.

56
Hence it is suggested that incentives should be extended to all types of cards to promote
greater usage of credit cards like „Exclusive‟ and „Silver held by lower and middle
income earners.
Providing More Facilitating Services
It is found from the analysis made in the study that supplementary services are
perceived more as the expected features of the credit card by the card holders. Hence
maximum supplementary service elements should be added to the credit cards.
Providing Knowledge about Supporting Services: It is identified from the study that
respondents did not consider the supporting services for purchase evaluation. This is
due to inadequate information regarding supporting services. Providing knowledge
about supporting services to customers can help the marketers to develop an advantage
for themselves in the market Visa Vis other players.
Reducing Interest Rates: One of the reasons for low level of satisfaction of card holders
has been the high rates of interest which the card holders are actually paying ranging
from 36 to 45 percent. Hence it is suggested that these rates be brought down.
Making the Internal Control System Effective :With the average credit limit of
Rs.10,000 to Rs. 30,000 the credit cards have not made an attractive case of fraudsters,
still a few cases of credit card frauds (02%) have been reported in the study. Hence
banks are advised to implement the “Internal Control System”formulated by the RBI
effectively to combat frauds.
Chapter 6

57
Conclusion
The credit card issue in terms of number of credit cards witnessed a whopping growth
during the past five years. In terms of key players ICICI has notched the landmark
figure of 90 lakh credit cards by 2008 taking the position of number one player in the
segment. It is further concluded that there are a number of bank customers who do not
have any knowledge about credit cards. Many people have knowledge about credit
cards, but do not possess credit cards because of the fear of falling into debt trap. High
income earners and highly educated class use credit cards more, availing high credit
limits. Extent of usage of credit cards is smaller among higher proportion of the card
holders. Customers‟ satisfaction is found to be less because of high rate of interest.
Customers perceived core services and facilitating services at higher level. Card holders
face the major problem of lack of proper advice from banks. Credit card market is yet
to realize its potential. The scenario of credit cards during 2009-2010is very significant.
Many card holders surrender their credit cards and instead of using credit cards the
banks‟ customers prefer debit cards. The debit cards too help them avoid carrying cash
and enable withdrawal of cash through ATM and they need not be afraid of falling into
debt trap as in the case of credit cards. Due to financial inflation, many banks have
stopped issuing credit cards to their customers. As people are yet to realize the complete
potential of credit card, its market is falling down.
Limitations of the Study
This study is subject to the following limitations

58
i. The study covers individual card holders only. Corporate card holders have
been excluded from this study.
ii. Credit card holders of Foreign Sector Banks have not been brought under the
purview of the study, since there is no Foreign Sector Bank in Salem District.
iii. Credit card holders and non-holders who do not have bank account are not
included in this study.
References
BOOKS: [1]. Arunajatesan.S and Radhakrishnan (2009), “Bank Management”,
Margham Publications, Chennai-600017, PP 3.10-3.24.

59
[2]. Balaji .S (1999), “Services Marketing and Management”, S.Chand& Co Ltd. (An
ISO 9001:2000 Company), New Delhi-110002, PP.85-92.
[3]. Bhalla V.K. (2005), “Management of Financial Services 2005”, an Mol
Publications Pvt, Ltd., New Delhi – 110002, PP 30-38.
[4]. Collier, D.A (1994), “The Service/Quality Solution”, Irwin Professional
Publishers, Distributors by IBD, New Delhi-110007, PP 166-175.
[5]. Dibakar (1999), “Marketing of Plastic Money”, Kanishka Publishers, New Delhi-
110005, PP67-74.
[6]. Foster (2007), “101 ways to Boost Customer Satisfaction – 2007” KOGAN Page
Ltd., New Delhi-110015, PP 15-22.
[7]. Gupta, S.L. “Marketing Sense”, S&S Publications, New Delhi-110010, PP 123-
131.
[8]. Gurusamy S (2004), “Financial Servicecs and Markets”, Thomson Asia Pvt. Ltd,
New Delhi-110014, PP.55-67.
[9]. HBF (2005), “General Bank Management”, Mc Millan, India Ltd., P 46.
[10]. Jha. S.M. (2007), “Services Marketing”, Himalaya Publishing House, Mumbai-
400005, PP45-56.
Appendices/Annexure
Customer perception towards credit cards issued by public and private banks
Hello:

60
You are invited to participate in our survey. It will take approximately 5 minutes to
complete the questionnaire.
It is very important for us to learn your opinions. Your information will remain
confidential and it will only use for academic research.
Thank you very much for your time and support. Please start with the survey now by
clicking on the button below.
1. What is your name……….
2. What is your gender ?
a) Male b) Female
3.What is your age group ?
a) 15 to 35 b) 35 to 50
c) 50 to 60 d) Above 60
4.What is your monthly income ?
a) < 50,000 b) 50,000 - 1,00,000
c) 1,00,000 - 2,00,000 d) More than 2,00,000
5.What is your occupation ?
a) Lawyer b) Doctor
c) Engineer d) Architect
e) Builder f) Consultant

61
g) Exporter g) Importer
h) Student i) Others , Please specify…
6. Name the bank of credit card which you are using?
a) ICICI bank b) HDFC bank
c) SBI bankd) CITI bank
d) BOI e) Syndicate Bank
f) Axis bank g) Other than the above…
7. Why have you chosen this bank ?
a) Past relationship b) Brand name
c) Near to home/office d) Others
8. What are the services provide by your credit card ?
a) Utility bill payment b) Cash advance
c) Secured online shopping d) Insurance
e) Convert credit line to cash f) Graces period
9. 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
10. How many credit cards are you having?
a) One b)Two

62
c) Three d)More than three
11. How did you came to know about this bank credit card ?
a)Self mode b)Bankers approach
c)Relatives d)Advertisement
12. Do you want to be a credit card holder for life long ?
a)Yes b)No
13. 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
14. The usage of credit card is more important.
a)Strongly Agree b)Agree
c)Disagree d)Strongly Disagree
15. Does credit card issued by your bank gives more security?
a) Strongly Agree b) Agree
c) Disagree d) Strongly Disagree
16. Does the customer care personally respond you at all times?

63
17. Does your bank offer more than other credit card the prizes, special discounts and
privileges?
18. Does your bank give the proper records of the credit card, credit rate calculations
that are made ?
19. Interest charges provide by your bank credit card is more higher than other bank.
20. Is your credit card is more useful for your business than other bank credit card?
21. There are more drawbacks in other bank credit card than your bank credit card.
22. Will you change if the advance facilities are offered by other bank?
a) Yes b) No

64
23. How would you rate your bank credit card?
a) Highly satisfied b) Satisfied
c) Dissatisfied d) Highly Dissatisfied

Pooja project on credit card (1)

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