Rama Krishna Sangem
Believe it or not, 93 per cent of low income people in India are now trapped in credit card trap. Yes, they borrow small amounts only to meet their monthly expenses – like food, electricity, rent, gas etc; They borrow money only to repay their dues or other credit cards or credit sources. Recently Excel India carried a story on how majority people are running to banks and non-banking financial companies for gold loans. Now this credit cards trap. This is what Think360.ai survey says.
Reflecting growing reliance on credit cards among low-income groups, a study has found that around 93% of salaried respondents earning less than Rs 50,000 per month rely on the plastic money. The study, which analysed the financial behaviour of over 20,000 salaried and self-employed individuals in India over a 12-month period, stated that 85% of self-employed individuals rely on credit cards.
Buy Now Pay Later services are also not behind with 18% of self-employed and 15% salaried persons using these products, the study by Think360.ai, released on Tuesday, stated. “In India’s evolving credit landscape, products once seen as aspirational, credit cards and BNPL are now essentials for everyone, from salaried professionals to gig workers,” Think360.ai Founder and chief executive officer A Amit Das said.
The report also underlined the growing dominance of fintechs, which are leading India’s digital lending revolution. In Fiscal 2023, fintechs disbursed over Rs 92,000 crore in personal loans, accounting for 76% of all new loan originations by volume, the study noted.
These figures reflect how underserved income segments are turning to short-term, digital-first credit products to manage cash flow, the study said, while calling for lenders to adapt their risk assessment models and use smarter AI-driven credit evaluation techniques.
This think tank report also mentions the growing influence of financial technology companies (fintechs), which are leading India’s digital loan revolution. The study said that fintech companies disbursed personal loans worth more than Rs 92,000 crore in the financial year 2022-23, which is 76 percent of all new loans by volume.
Credit card rules changed
It is worth noting that credit card holders are given a fixed time limit by the bank to pay the money. Apart from this, after spending up to a limit on the credit card, many types of offers are given by the bank. In such a situation, it is quite popular for low-income people from paying household bills to shopping.
Now SBI has changed some rules for credit card holders. These changes include minimum amount due as well as free insurance and payment settlement process avai
