Cibil’s survey shows credit card payment by Indians high
KOLKATA: Indian credit card customers have improved their payment behaviour, with about 78 per cent of them paying off monthly bills fully, leading to an all-time low delinquency rate, credit information firm TransUnion Cibil said.
This is the most important takeaway from a survey done by TransUnion Cibil covering 1,100 consumers across eight metros.
What’s more, India tops the rank in the percentage of credit card holders that often make payments in excess of their minimum due on their revolving debts each month compared to other countries.
The study observed that 92 per cent of credit card holders often pay a greater amount than the minimum due. If consumers fail to pay the minimum due, they are considered as defaulters but when consumers pay anything between minimum due and full amount, then they are liable to pay 33-36 per cent interest rate on the amount.
"The delinquency rate has gone down over the years," the company’s chief operating officer Harshala Chandorkar told ET. "This, along with a healthy growth in number of credit cards, is an encouraging sign for the credit card industry," she said. India has some 2.7 crore credit cards in the system.
This is the first time TransUnion CIBIL has conducted such a survey on credit card payment pattern and therefore there was no comparable statistics.
However, the delinquency trends (90 days or more past due) in December 2016 has improved to 1.51 per cent from December 2015’s 1.65 per cent, showing relatively stable performance overall. The delinquency trend data is based on the data reported by member banks and financial institutions.
"Analysis conducted on longterm payment behaviour suggests that consumers who pay more than their minimum payment due on credit cards are less likely to go delinquent. Such findings derived from trended data could help improve risk assessment for lenders while providing higher opportunities to consumers with lower risk profile across retail lending portfolios," she said.
The trended data analysis leverages up to 36 months of historical information.
This is the most important takeaway from a survey done by TransUnion Cibil covering 1,100 consumers across eight metros.
What’s more, India tops the rank in the percentage of credit card holders that often make payments in excess of their minimum due on their revolving debts each month compared to other countries.
The study observed that 92 per cent of credit card holders often pay a greater amount than the minimum due. If consumers fail to pay the minimum due, they are considered as defaulters but when consumers pay anything between minimum due and full amount, then they are liable to pay 33-36 per cent interest rate on the amount.
"The delinquency rate has gone down over the years," the company’s chief operating officer Harshala Chandorkar told ET. "This, along with a healthy growth in number of credit cards, is an encouraging sign for the credit card industry," she said. India has some 2.7 crore credit cards in the system.
This is the first time TransUnion CIBIL has conducted such a survey on credit card payment pattern and therefore there was no comparable statistics.
However, the delinquency trends (90 days or more past due) in December 2016 has improved to 1.51 per cent from December 2015’s 1.65 per cent, showing relatively stable performance overall. The delinquency trend data is based on the data reported by member banks and financial institutions.
"Analysis conducted on longterm payment behaviour suggests that consumers who pay more than their minimum payment due on credit cards are less likely to go delinquent. Such findings derived from trended data could help improve risk assessment for lenders while providing higher opportunities to consumers with lower risk profile across retail lending portfolios," she said.
The trended data analysis leverages up to 36 months of historical information.
