Why is there such a low penetration of credit cards in India ?? What problems do guys face in relation to credit cards and needs to change ??
Among all my friends, I'm the only one who has and uses credit cards
None of my friends really understand (or bother to understand) the benefits of having a credit card and their parents have passed on certain misconceptions about terrible debt that owning credit cards brings along with it
THIS! Most Credit Card holders will be from this generation. The previous generation is afraid to even use Debit Cards and UPI, let alone a Credit Card. Some people in this generation again have misconceptions regarding a Credit Card. I was told by my elder cousin (in his early 30's) that Credit Cards are only for wealthy folks and middle class people like us should not use them since they're not meant for us.
Everybody in my BFSI circle uses a Credit card and flaunts it. I haven't met a single revolver personally (atleast who has confessed to be).
Outside my BFSI bubble, it is a complicated product to understand. Especially the billing is complicated. People are unaware about the interest free period, feel like there are unnecessary fees. Some have gotten burnt after withdrawing cash and so closed it soon.
For a new customer, even a 50Rs interest or fee feels like a pinch for Indian mentality. These customers stay away or stay as deadbeats. Transparency in billing and cashback would definitely help here. And warning signs of charges before spending. Eg: warning flashing that I will be charged XX as fee and interest if I am using my CC to withdraw from ATM. What currently happens is a shock at the billing date.
Also reminders. Please spam the fuck out of people 1-2-3-4-5 days before their billing date. And let them know in advance every month, what all charges in exact Rs would they incur if they pay MAD or don't pay at all.
Some lazy people might promptly pay and some credit averse people might revolve if you show them monetarily that a month worth of 3% interest isn't actually much.
On the convert to EMI option, these loans aren't as predatory as I though earlier. A 16% annual loan on 1L spend, only costs me Rs730 monthly, which feels okay to me. But the 16% headline rate feels very high as mentally it gets benchmarked to Homeloan, FD or savings rate. This change in perspective helps. Most CC apps do not design their UX around this.
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Cancel your credit cards and any postpaid credit apps like Paytm or Ola money. Learn to live within your means.
