Getting a credit card is not easy

Now days you might be getting fewer irritating calls from banks BPOs offering you credit cards.

After the hike in interest rates and inflation shooting above 12% banks have gone slow on the sale of credit cards as many of the customers either have missed payment deadlines or in some cases even defaulted.

Parag Rao, head, credit cards, HDFC Bank said irregularities in payments among customers “have been on the rise for nine to 12 months because of over-leveraging and rising interest rates”.

In the past two quarters, most of the banks have raised the monthly interest rate by half a percentage point which has pushed up repayment liabilities of credit cards.

“The growth of new cards has been slow for six months,” said Sachin Khandelwal, head, card services at ICICI Bank. Though he refused to reveal any figures, but an executive at a private bank, on condition of anonymity, told the growth of new cards has slipped down by 50 per cent in comparison to last year.

Only fewer cards are being offered and banks have stern eligibility norms. “Most banks have tightened credit screens to get new customers,” said Khandelwal.

Subrat Pani, business head – cards, Kotak Mahindra Bank informed that banks are depending on the Credit Bureau from where banks get credit records of people who have borrowed from financial institutions.

Pani said banks are also recognizing groups vulnerable to defaulting. Some banks, for instance, some of the banks are now not willing to issue cards to those who are below 27 and are working in BPOs. This blacklist has the names of politicians, cops, journalists and lawyers.