Credit card usage is on the rise across the country with the easing of lockdowns. Customers want to buy even the cheapest items in the form of EMI payment. This has led to an improvement in the credit business of credit card companies.
The current trend is to buy smartphones, mixers, grinders, kitchen utensils, headphones, speakers and other home appliances through credit cards and pay for them in several installments. The reason for the increase in the method of payment as EMI is the low income of the people following COVID-19.
The financial crisis caused by COVID-19 led to a significant decline in the income of the common people. There are many people who are late in getting their salaries, have had significant pay cuts or are on the verge of losing a job. In this case, most people spend money very carefully. Instead of paying together, more and more people are paying for several months. The idea is to have as much money as possible in times of crisis. This has turned out to be a boon for credit card companies.
One of the reasons for this is that NBFCs, which were previously dominant in the consumer finance market, have lagged behind in business. The zero Interest EMI scheme offered by NBFCs and banks is no longer available. Many companies have withdrawn such schemes. Many companies have withdrawn such schemes. With this, the use of credit cards has increased. All credit card companies have an EMI payment scheme. Credit card loans have increased by 30-40 per cent compared to the period before COVID-19.
In general, the credit business fell by 70 per cent during the COVID-19 period. At the same time, NBFCs’ consumer finance fell by a third. This has been beneficial for credit card companies.
In this case, the business of credit card companies is likely to improve. SBI Cards is the only company listed on the stock exchange in this field. The company went public last March.
