Credit Cards: A Sectoral Analysis

Background: India, being one among the fastest growing economies in the World, yet there exists an enormous gap in having access to formal credit when compared to advanced countries. Banks and financial institutions are continuously striving to fill this gap with the aid of introducing new payment merchandise and units that would make accessibility to credit less difficult. Historically, formal credit was only restricted to financial products like home, car and private loans, but now it's been shifted to instruments such as credit cards. Credit cards have witnessed big scale issuance and increase in usage. Despite the fact that, traditionally India has been a debit card marketplace, the boom in credit card market has modified this narrative and credit cards have been prominently used in recent times. Objective: This paper aims at sectoral analysis of the credit card industry in India by considering top three credit card issuers i.e., HDFC bank, SBI Cards, and ICICI Bank. Methodology: In order to study the credit card industry in India, its growth and usage, secondary data from various sources were analysed. A SWOT analysis was conducted to depict the strengths, weakness, opportunities and threats of credit card industry. Findings and Conclusion: Sectoral analysis of HDFC, SBI and ICICI bank indicates that usage and growth of credit cards in India has tremendously increased over the years. However, India has a long way to go and potential to explore the credit card market. Security issues has always been a concern in the credit card market. Credit cards have proved to be convenient in managing ones expenses, at the same time it needs to be used carefully in order to avoid debt traps, in case of over spending. Paper Type: Case Study based research analysis on credit cards industry by highlighting about 3 major credit card issuers i.e., HDFC bank, ICICI Bank and State Bank of India.