Though the number of credit cards has been growing at a good pace, of late, debit cards growth is outpacing the credit cards. It shows that either the banks are charging too much for credit cards with regard to fees, interest etc., or Indians are conservative and they dont want to put themselves in a debt trap. Also, to obtain a debit card only savings account is required with a bank.
Credit
cards came to India in 1970s where as debit card was
first launched in India in 1998, but as of September
2005, there were more active debit cards than credit
cards. The popularity of debit card is mainly due to
the fact that unlike the western world, where the culture
is to live on loan, Indians are credit shy people.
Both
debit and credit card are plastic money, look alike
and are identical in size (2"x3"), but they
are exactly two diametrically opposite banking product.
Credit card is basically an asset product of bank which
is nothing but a personal loan whereas debit card is
just an easy access into one's own savings account.
The pattern of usage is the same but in case of the
former the card holder is using the bank's money whereas
in case of the later the card holder is using his own
money. It is mainly due to the fact that Indians are
credit shy and conservative by nature, so they are more
comfortable with debit card where they use their own
money, than using credit card, where they have to use
bank's money. It is often said now that "Credit
Shy Indians Are Going By Debit Card." |
