No more easy to own a credit card? | india | Hindustan Times
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No more easy to own a credit card?

Looking to own a credit card? It may not be easy any more to get one until you have a clean credit history.

india Updated: Feb 21, 2012 00:27 IST
Mahua Venkates

Looking to own a credit card? It may not be easy any more to get one until you have a clean credit history.


After a lull of two years, the credit card industry is set to grow again though banks have become "choosy" and would prefer to decide their own customers, for say, those who have "exceptionally clean" credit record.

The credit card industry grew at 30% between 2002-03 and 2007-08, after which the growth dropped to less than 10% in 2011.

Thanks to the cautious approach by banks such as Citibank, ICICI Bank, HDFC and other credit card issuers, the default rate on plastic money has also dropped roughly to 6% from a high of above 10% in the last 18 months. However, banks are hoping to now expand their plastic money portfolio. http://www.hindustantimes.com/Images/HTEditImages/Images/21feb_biz4.jpg

"Banks are no more aggressively issuing cards to people and they are also keeping a tab on the spends while focusing on recoveries, (and) this has significantly helped in bringing down the delinquency rate," a senior executive at the State Bank of India (SBI) told HT on condition of anonymity. SBI has a joint venture with the GE Capital in the credit card space.

RBI has also asked banks to be cautious in lending on plastic money that is considered an unsecured loan. Besides, before issuing credit cards, all banks have started running a stringent credit check including checking with the CIBIL India - the credit bureau on credit scores.

"We now want to issue cards to a credit worthy customer and not blindly acquire customers, an individual who already owns a credit card may not be eligible for another," a spokesman at a private sector bank said.