In New Delhi, (India), the credit crunch is forcing card issuers and banks to go slow when issuing out credit cards. This worry is now making banks seek customers of mid and high income to ensure a steady repayment.   

 It has been revealed by industry insiders that the yearly growth rate could slip to 25%, whereas over the last couple of years the rate was 30-35%.

The general manager of head of credit cards and personal loans stated: “Banks are becoming careful about unsecured lending at this critical juncture when the economy is slowing down and prices are moving northwards.”

Currently, the default rates for payments is around 7.5-9% according to CCMC information. Consumers in India spend an average of Rs 4,000 a month on their cards. This is because with inflation, interest rates for home loans and other types of loans have increased. This in effect, has decreased the income of consumers, hence resulting in more people using plastic money.

There is thought to be around 40% credit card usage in the country.