CHAPTER I INTRODUCTION

1.1 Introduction
A credit card is a widely used tool in personal finance that is part of a system of payments named after the small plastic card issued to card-holders, who have the authorization to purchase goods and services up to a predetermined amount, called a credit limit. The vendor receives essential credit card information from the cardholder, the bank issuing the card actually reimburses the vendor, and eventually the cardholder repays the bank through regular monthly payments. If the entire balance is not paid in full, the credit card issuer can legally charge interest fees on the unpaid portion. The issuing bank does allow credit card users to carry over balances every month, but significant interest rates may also accrue on those balances. Missing a scheduled payment can also prompt the bank to raise interest rates on a delinquent account. If a credit card holder can only afford to pay the minimal amount due every month, he or she will not be reducing the actual debt incurred. The minimal payments may only apply to the accrued interest. This is a financial spiral many credit card users may experience if they don't use proper spending restraint.A credit card does give the holder an immediate credibility for services such as hotel reservations, car rentals and airline ticket reservations. Those without a credit card often have to guarantee their reservations with cash deposits or several forms of identification. A credit card holder can authorize other people to use the card for purchases or services, however. Ultimately, the primary cardholder is responsible for all charges placed on his or her account. In order to avoid excessive credit card debt, the holder must decide if the goods or services are worth the added expenses. .

1.1.1 Global Commercial Banking Outlook

Outlook Continues To Improve... With Risks In line with generally improving world macroeconomic conditions, the outlook for the global banking sector continues to solidify. Although we are mindful of risk from rising oil prices and inflation, unrest in the Middle East and North Africa (MENA) and reverberations from the global supply chain emanating from Japans earthquake and tsunami, our global outlook remains generally upbeat. This backdrop should provide a sufficient foundation for continued loan and asset growth. This is particularly the case for emerging markets and developed states that did not experience banking sector crises in 2007-2009. Major potential headwinds include global monetary tightening, which will be concentrated in emerging markets. US and Eurozone: 2011 and 2012 are set to be slow growth years for the eurozones banking sector as the effects of fiscal austerity are felt across the currency bloc and banks remain hesitant to significantly ramp up lending towards the levels experienced prior to the global financial crisis, particularly amid tighter capital constraints. That said, despite monetary tightening, confidence in the eurozone banking sector has continued to hold up well. This supports our view that the risks from monetary tightening to consumer demand and banking sector stability in the eurozone have been overplayed. Emerging Asia: The Emerging Asia banking outlook is generally positive, though we have some concerns about some of the highest flying sectors. Despite the potential for economic damage following the March 2011 earthquake and tsunami to have a negative impact on Japanese banks assets in the short term, we are bullish about Japanese banking sector equities. However, we note that this is due to our expectation of multiple expansion rather than improvements to banks balance sheets, which we expect to be negatively affected by rising bond yields. Emerging Europe: With the exception of idiosyncratic cases, banking sectors across emerging Europe are broadly on the road to recovery and due to expand at a faster rate in 2011 than in 2010. Efforts to raise capital ratios, as well as less severe sovereign debt stresses than in the eurozone and the UK, will buoy sentiment and growth over the medium term.

1.2. Need for the Study

There have been more and more banks in recent times emerging and competing in the Jaipur city credit card market to attract and retain customers with a variety of credit cards customized to meet different and evolving customer needs. Hence the present study on credit cards as an alternative source of personal finance helps in understanding what features, benefits of credit cards attract consumers and account for the phenomenal growth in the usage of credit cards within the Jaipur city today. The present study enables to understand the factors influencing consumer preference or otherwise for credit card, as an alternative source of personal finance.

1.3 Objectives of the study

Enlisted below are the primary objectives for this study: 1 A critical study of Indian Banking sector, so as to understand the projected growth for credit card market in Jaipur city. 2 To analyse the role of credit card as a means of personal finance and the factors influencing the preference of the same among retail consumers of Jaipur city. 3 To understand the relative features benefits and purposes of few of the leading credit cards issued by banks in Jaipur city. 4 Evaluating the credit cards in terms of the performance of the respective bank.

1.4 Limitations to the study

1 This study is bound by time constraints and the analyses performed and data collected will be relevant for the concerned time-period only. 2 The secondary data used in this study has been previously researched and has not been recently re-established with reference to the current scenario, so maximum possible accuracy has been attempted with respect to the secondary data. 3 The primary data has been gathered from a restricted representative sample set of 50 banking customers, owing to time, resources and cost constraints.

1.5 Expected Contribution from the Study

The viability of credit cards as an alternative source of personal finance will be analyzed.

By studying the most preferred credit cards issued by five selected leading banks from the Jaipur city with the aim of covering the aspects of and raising questions in the following areas such as: 5.1 Why bank-issued credit cards are more widely used by consumers in the Jaipur city as compared to other sources to finance. 5.2 Preferences for certain card features, benefits and purposes associated to a credit card making it more popular over its counterparts.

CHAPTER IV RESEARCH METHODOLOGY

4.1 Research Design
Research methodology section of this Project describes the method of procedure for conducting this study. It specifies what the problem is, sources and types of information, population and sample, procedures and techniques for collection and analysis of data. As this study aims to perform an analysis of the reasons for consumer preferences for credit cards in the Jaipur city by studying the most popular credit card features and from among four leading banks in the Jaipur city, namely HDFC Bank, ICICI Bank, IDBI Bank, and HSBC bank. These banks have been selected on the basis of the criteria of high repute and popular acceptability among Jaipur city consumers and convenient access to their array of accurate financial reports on their websites. A section-based questionnaire is to be prepared and tested upon a representative sample size of 50 consumers within the Jaipur city. This is to collect first-hand primary data to fulfil the objective of studying credit card preferences within the Jaipur city. Owing to time and cost constraints, the aim for a higher sample size is difficult to accomplish. For the purpose of critical studies and research, owing to time constraints and the easy availability of secondary data in the form of relevant financial websites, newspapers and published library journals, various references have been utilized and given due mention within the appendix for the critical aspects.

4.2 Nature of data

For the purpose of this Project, both secondary data and primary data will be used. Primary data is authentic data and it will be collected from the Jaipur city and analyzed. The secondary data has been taken from various appropriate online and library references that have been duly noted in the appendix valid RETAIL consumers within the Jaipur city. The definitions and theoretical aspects of this Project represent secondary data collected from various sources such as websites and the library. Being aware of the limitations of

dealing with secondary data in terms of relevance and validity, the available secondary data at hand has been as accurately presented as possible within the Projects constraints.

4.2.1 Source and Collection of Data.

The Project is based on both primary and secondary data. The primary data has been taken from a convenient representative sample size of 50 banking customers within As credit card spending rises, providers across the Jaipur city are competing to offer consumers greater variety than before. Consumers have become sophisticated and demand value-added benefits along with credit cards. The present study ultimately endeavours to analyse the factors responsible for the attractiveness of bank-issued credit cards as a suitable personal finance option for Jaipur city retail banking consumers, addresses the determinants for the preference of local bankissued credit cards and therefore attempts to find out the numerous reasons for which credit cards build faith in the minds of individual Jaipur city retail banking consumers.

4.2.2 Tools and Techniques of Analysis.

The primary data is collected using the assistance of a questionnaire having certain openended questions and multiple-choice questions to allow for freedom of consumer opinion and broaden the scope of analysis. Pie-chart graphs have been used to analyze the percentages of consumers preferring certain credit cards over others to show the most preferred credit cards in the Jaipur city. Other such graphs will also show how many consumers make the minimum payment on their credit cards or use other personal finance approaches in settling their credit card bills. These graphs will then be used in analyzing what features and aspects of credit cards attract consumers to use them as the most popular source of personal finance and why credit card issuing companies are / are not gaining acceptance within the Jaipur city credit card market. The ease of options in the questionnaire with room for personal opinion and the visual presentations provided by these charts will allow for ease of analysis and provide greater clarity for understanding the results

Indian banking sector outlook In a historic event for India's capital markets, London-based multinational bank Standard Chartered looks set to become the first overseas firm to list in India. This is as an indication of the gradual relaxation of regulation in the Indian banking sector. In a long-term play to the significant growth potential of the sector, Standard Chartered plans to list 240mn India. Depository Receipts (IDRs) on the Mumbai and National stock exchanges. In doing so, the bank is hoping to raise up to US$600mn. As overseas firms are prevented from listing ordinary shares in India, IDRs offer an alternative and allow investors to participate in rights issues and company votes. As a result, Standard Chartered's move could be followed by its multinational rivals in India, such as Citibank, Deutsche Bank and HSBC. It seems that India's legacy of protectionism in the commercial bankingsector is slowly beginning to soften, allowing the bankingindustry, which is dominated by public sector banks, to gradually open up to competition from foreign lenders. Overseas lenders have long been hampered by the Indian government's tight control over the banking sector. Although protectionist measures such as caps on foreign stakes in local banks at 10% and the Reserve Bank of India's monopoly over licensing issuance for new branches remain in place, the first IDRs highlight a move towards liberalisation of the country's banking sector. The IDR platform, which Standard Chartered is likely to be the first firm to utilise, was passed into law in June 2009. It is intended to allow local investors to buy foreign stock through an Indian broker. Also, as IDRs are denominated in local currency, they sidestep restrictions attached to overseas investments. We believe the qualitative reasons for issuing IDRs are equally as important. Standard Chartered's IDRs are primarily about the bank increasing its visibility in India and giving local staff the opportunity to buy into the company for the long term. Had it simply been a matter of raising the cash to fund growth then it would have been far less cumbersome for Standard Chartered to tap markets in London or Hong Kong, where it is already dual-listed.

Indian bank credit outlook Banks loan growth continues its southward journey, as loan growth on a year-onyear basis fell to 17.67 per cent as on this November 18, the lowest since May 2010. The Reserve Bank of India predicts an 18 per cent loan growth for the current financial year.Bankers are of the view that it is the current economic scenario tha thas led to moderation investments; hence, a decline in credit growth.

Investments have dropped on the whole, said M Narendra, chairman and managing director, Indian Overseas Bank. Also, both banks and companies are becoming extra-cautious due to overall slowdown.According to latest data released by RBI, credit disbursal increased by Rs 8,500 crore for the fortnight ended on November 18, while outstanding credit stood at Rs 41,80,474 crore.The deposit growth has also been falling. Year-on-year deposit growth stood at 16.37 per cent as on November 18, as against 17.5 per cent on a fortnight before that on November 4. Attractive returns on public provident fund and a ploughback of surplus cash by public sector companies have led to the sluggish deposit growth.A top public-sector bank official said PSUs are putting back their surplus instead of putting the money in current deposits. This is being done in order to reduce the debt burden of the state governments, he added.Banks, too, said they were aiming to cut down on their high cost wholesale deposits in the current low credit growth scenario.

HDFC BANK HDFC Bank Limited (the Bank) is a banking company. The Bank is engaged in providing a range of banking and financial services. The Bank operates in four segments: treasury, retail banking, wholesale banking and other banking business. The treasury segment primarily consists of net interest earnings from the Banks investments portfolio, money market borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and derivative contracts. The retail banking segment raises deposits from customers and makes loans and provides other services. The wholesale banking segment provides loans, non-fund facilities and transaction services to large corporates, emerging corporates, public sector units, government bodies, financial institutions and medium scale enterprises. The other banking business segment includes income from para banking activities, such as credit cards, debit cards and third party product distribution, primary dealership business.
Date of Establishment Revenue Market Cap Corporate Address -08 1994 4469.21 ( USD in Millions ) 1090071.48292875 ( Rs. in Millions ) Hdfc Bank House,Senapati Bapat Marg,Kamala Mills Compound Lower Parel (West)Mumbai-400013, Maharashtra www.hdfcbank.com Chairperson - C M Vasudev

Management Details

Business Operation Background

Financials

Company Secretary Bankers Auditors

MD - Aditya Puri Directors - A N Roy, Aditya Puri, Anami N Roy, Arvind Pande, Ashim Samanta, Bobby Parikh, C M Vasudev, Chander Mohan Vasudev, Gautam Divan, Harish Engineer, Jagdish Capoor, Keki Mistry, Pandit Palande, Paresh Sukthankar, Partho Datta, Renu Karnad, Sanjay Dongre, Shailendra Bhandari Bank Private The HDFC Bank was incorporated on August 1994 by the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. The Housing Development Finance Corporation (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, a Total Income - Rs. 242633.649 Million ( year ending Mar 2011) Net Profit - Rs. 39264.009 Million ( year ending Mar 2011) Sanjay Dongre No Bankers Details in A.R Haribhakti & Co

HDFC Bank Gold Credit Card

Card Provider: Visa Purchase Interest Rate: 2.95% Cash Withdrawal Rate: 2.50% Add On Card Fee: No Balance Tranfer Fee: Yes

Card Type: Gold Annual Fee: Yes Rewards: Yes Photo Card Fee: No

Balance Transfer : Available Eligibility : Minimum Income: Rs. 200,000/- p.a. (self employed) | Rs. 150,000/- p.a. (salaried) Grace Period : 50 days Min.Monthly Payment : 5%

Reward Program : Up to 5% cash back on air and train tickets | Higher credit limit | Earn 2 reward points for every Rs.150 spent

HDFC Bank Titanium Credit Card

Card Provider: Mastercard Purchase Interest Rate: 2.65% Cash Withdrawal Rate: 2.50% Add On Card Fee: No Balance Tranfer Fee: Yes

Card Type: Titanium Annual Fee: Yes Rewards: Yes Photo Card Fee: No

Balance Transfer : Available

Add to saved cards

Eligibility : N/A Grace Period : 50 days Min.Monthly Payment : 5% Reward Program : Earn 2 points per Rs 100 spent | Worldwide concierge services | 0% fuel surcharge at all outlets |

ICICI BANK
ICICI Bank Limited (the Bank) is a banking company. The Bank, together with its subsidiaries, joint ventures and associates, is a diversified financial services group providing a range of banking and financial services, including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. It operates under four segments: retail banking, wholesale banking, treasury and other banking. Retail Banking includes exposures,

which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures. Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under Retail Banking. Treasury includes the entire investment portfolio of the Bank. Other Banking includes hire purchase and leasing operations and other items.
Date of Establishment Revenue Market Cap Corporate Address 1994 5825.08 ( USD in Millions ) 907754.5912833 ( Rs. in Millions ) Landmark,Race Course Circle,AlkapuriVadodara390007, Gujarat www.icicibank.com Chairperson - K V Kamath MD - Chanda Kochhar Directors - Anup K Pujari, Anupam Puri, Arvind Kumar, Chanda D Kochhar, Chanda Kochhar, Homi Khusrokhan, Homi R Khusrokhan, K Ramkumar, K V Kamath, L N Mittal, M K Sharma, M S Ramachandran, M S Ramchandran, Madhabi Puri Buch, Marti G Subrahmanyam, N S Kannan, N Vaghul, Narendra Murkumbi, P M Sinha, Rajiv Sabharwal, Sandeep Bakhshi, Sandeep Batra, Sonjoy Chatterjee, Sridar Iyengar, T S Vijayan, Tushaar Shah, V Prem Watsa, V Sridar, V Vaidyanathan Bank - Private ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an allstock amalgama Total Income - Rs. 326219.453 Million ( year ending Mar 2011) Net Profit - Rs. 51513.762 Million ( year ending Mar 2011) Sandeep Batra BSR & Co

Management Details

Business Operation Background

Financials

Company Secretary Bankers Auditors

ICICI Bank Platinum Credit Card

Card Provider: Visa Purchase Interest Rate: 1.99% p.m Cash Withdrawal Rate: 3.15% p.m Add On Card Fee: No Balance Tranfer Fee: Yes

Card Type: Platinum Annual Fee: Yes Rewards: Yes Photo Card Fee: No

Balance Transfer : Available

Add to saved cards

Eligibility : By Invitation Only | Minimum income: Rs. 4,80,000 p.a. Grace Period : 22 to 52 dayss Min.Monthly Payment : 5% Reward Program : Priority access to airport lounges | High Credit and Cash Limit | 0% fuel surcharge on all outlets Annual Fee : Rs. 2500 Other Fee Notes : Joining Fee: Rs.25000

CICI Bank Titanium Credit Card

Card Provider: Mastercard Purchase Interest Rate: 3.15% p.m Cash Withdrawal Rate: 2.50% p.m Add On Card Fee: No

Card Type: Titanium Annual Fee: Free Rewards: Yes Photo Card Fee: No

Balance Tranfer Fee: Yes

Add to saved cards

Balance Transfer : Available Eligibility : Minimum Income: Rs. 3,60,000 p.a. Grace Period : 22 to 52 dayss Min.Monthly Payment : 5% Reward Program : Access of Oberoi Airport Lounges in India | 10 Reward points per Rs.200 of international spend | Up to 25% discounts at major restaurants in top 6 Indian cities | 0% fuel surcharge across all outlets Other Fee Notes : Joining Fee: Rs.0

IDBI BANK IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank has essayed a key nation-building role, first as the apex Development Financial Institution (DFI) (July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service commercial Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI stretched its canvas beyond mere project financing to cover an array of services that contributed towards balanced geographical spread of industries, development of identified backward areas, emergence of a new spirit of enterprise and evolution of a deep and vibrant capital market. On October 1, 2004, the erstwhile IDBI converted into a Banking company (as Industrial Development Bank of India Limited) to undertake the entire gamut of Banking activities while continuing to play its secular DFI role. Post the mergers of the erstwhile IDBI Bank with its parent company (IDBI Ltd.) on April 2, 2005 (appointed date: October 1, 2004) and the subsequent merger of the erstwhile United Western Bank Ltd. with IDBI Bank on October 3, 2006, the tech-savvy, new generation Bank with majority Government shareholding today touches the lives of millions of Indians through an array of corporate, retail, SME and Agri products and services.

Headquartered in Mumbai, IDBI Bank today rides on the back of a robust business strategy, a highly competent and dedicated workforce and a state-of-the-art information technology platform, to structure and deliver personalised and innovative Banking services and customised financial solutions to its clients across various delivery channels. As on March 31, 2011, IDBI Bank has a balance sheet of Rs.2.53 lakh crore and business size (deposits plus advances) of Rs.3.38 lakh crore. As an Universal Bank, IDBI Bank, besides its core banking and project finance domain, has an established presence in associated financial sector businesses like Capital Market, Investment Banking and more recently, the Mutual Fund Business. Going forward, IDBI Bank is strongly committed to work towards emerging as the 'Bank of choice' and 'the most valued financial conglomerate', besides generating wealth and value to all its stakeholders.

COMPANY INFORMATION Full name IDBI Bank Ltd Legal Address Idbi Tower, Wtc Complex, Cuffe Parade; Mumbai; Maharashtra; 400005

Status: Listed Legal Form: Other non-liability limited Operational Status: Operational ISIN CODE : INE008A01015 Financial Auditors: Chokshi & Chokshi (2010) Incorporation Date: July 1, 1964 Total Employees: 8,253 Tel: 022-6655 2779 / 6655 3062 / 6655 2620

HSBC BANK
HSBC Bank is a subsidiary of HSBC Holdings plc, a London based banking giant which, according to the Forbes magazine, is the largest banking group in the world, and the 6th largest company in the world as of April 2009. HSBC Holdings had been established in Hong Kong in the year 1990 as the parent company to the Hongkong and Shanghai Banking Corporation (HSBC). Further, the bank moved its headquarters from Hong Kong to London

Presence In India In India, the introduction of HSBC Bank can be dated as early as the year 1853, with the establishment of the Mercantile Bank of India in Mumbai. Currently, HSBC Group operates through a number of its subsidiaries in India, viz. The Hongkong and Shanghai Banking Corporation Limited (HSBC), HSBC Asset Management (India) Private Limited, HSBC Global Resourcing / HSBC Electronic Data Processing (India) Private Limited, HSBC Insurance Brokers (India) Private Limited, HSBC Operations and Processing Enterprise (India) Private Limited, HSBC Private Equity Management (Mauritius) Limited, HSBC Professional Services (India) Private Limited, HSBC Securities and Capital Markets (India) Private Limited and HSBC Software Development (India) Private Limited. The group carries out its Commercial Banking, Banking Technology, Asset Management,

Global Resourcing, Insurance and Data Processing operations in the country through its subsidiaries. Commendable Achievements HSBC Bank is well known for having established the first ATM (Automatic Teller Machine) in India in the year 1987. As of April 2009, the bank is present in many prominent cities of the country including Mumbai, New Delhi, Bangalore, Hyderabad, Jaipur, Chandigarh etc.
Head Office HSBC Bank, Flora Fountain, Mumbai (Maharashtra), Website: http://www.hsbc.co.in

HSBC Gold Credit Card

Card Provider: Visa Purchase Interest Rate: 3.10% Cash Withdrawal Rate: 2.50% Add On Card Fee: No Balance Tranfer Fee: No

Card Type: Gold Annual Fee: Yes Rewards: Yes Photo Card Fee: No

Balance Transfer : Available

Add to saved cards

Eligibility : N/A Grace Period : 52 days Min.Monthly Payment : 5% Reward Program : Earn 1 Reward Point on every Rs. 100 spent | 0% fuel surcharge at all outlets | Up to 10% cash back on travel bookings with makemytrip.com | High Credit limit

HSBC Classic Credit Card

Card Provider: Visa Purchase Interest Rate: 3.10% Cash Withdrawal Rate: 2.50% Add On Card Fee: No Balance Tranfer Fee: No

Card Type: Silver Annual Fee: Yes Rewards: Yes Photo Card Fee: No

Balance Transfer : Available

Add to saved cards

Eligibility : N/A Grace Period : 52 days Min.Monthly Payment : 5% Reward Program : Earn 1 Reward Point on every Rs. 100 spent | 0% fuel surcharge at all outlets | Up to 10% cash back on travel bookings with makemytrip.com

CHAPTER VI FINDINGS
5.1
1

Findings (Based on survey questionnaire)

The gender composition of 76% male & 24% female was in line with the gender

composition of Jaipur city. 2 Self employed (14%) and Service sector (58%) shows that the respondents belong to these two sectors make use of credit cards more widely and were in line with demographic composition of Jaipur city. . 6 Most of the respondents have cited hidden financial charges as common problem regarding credit card. 7 Respondents have expressed very little preference for the use of cheques in making payments. 8 Major credit card usage patterns cited by 76% of male respondents use credit cards for Shopping, Dining, Entertainment etc.

Most of the respondent who prefer credit card as mode of payment fall under Rs 5000 - 10000 income group. In fact credit card used to be yet another useful source of short tern finance for this group of income holders.

10 The monthly expenses analyses of the respondents indicate that 82% of them were not spending more than Rs 6000. This shows that though 84% of the respondents were having a monthly income of above Rs 5000, the spending nature was very less and most of them saving or locally remitting to their home country but were not spending in Jaipur city. 11 The fact that 33% of the respondents prefer credit card and 19% of respondents prefer debit card as the preferred mode for making payments shows that plastic money payment was very dominant among the respondents. The cash mode of payment was more among male respondents than the female respondents, which shows that females were more particular not to make cash payments as cash was more risky to handle than the credit/debit card means. 12 86% of all respondents have cited the major reasons of a. Convenient access to liquid cash b. Ease of obtaining loans c Loyalty incentives. In the order for their preference for credit card over other personal finance options.

16) 76% of male respondents have cited the following frequency of credit card usage(in order of preference) a. For any purchase b. Only air-ticket booking 13 c. Only weekend shopping

14 Most of the respondents have cited the following adopted approaches for settlement of their credit card bills (in order of preference)

o a. Full repayment within 50 days of purchases, interest-free o c. Minimum payment required only o b. Fixed payment every month o d. Less than the minimum payment required

CHAPTER VII CONCLUSION

Credit card purchases must be encouraged Whether its buying gold or electronic goods, booking holidays or air tickets, or even paying a water and electricity bill, consumers are unfairly slapped with a 2.5 per cent levy for simply opting to place their purchase on plastic. Having to pay extra costs for using plastic undermines the move towards e-services. Times are changing. There is a movement to purchase goods and services online. E-services are efficient, manpower lean and are the way of the future. Having to pay extra costs to use a credit card is a deterrent and undermines this move towards effective and efficient e-services. Merchants will need to simply build the methods of payment into the cost of doing business. In these times of challenging economic conditions, the consumer should not be penalised for using a credit card to make purchases. The factors determining the selection of credit card indicates that Low interest rates and cash back schemes would trigger the respondents motivation to select a card. Also the hidden charges and poor customer services are most common problems faces by the respondents. Therefore banks should take steps to improve its post sales customer services, reveal all the charges in detailed schedule. Mashreq Bank and RAK Bank, among the banks included under the study, must take into consideration the common problems of poor customer service and hidden financial charges reported by the majority of respondents who use their credit cards and must provide more clarity and transparency to their retail banking consumers about their entire system of financial and service charges for their credit cards. Also, they must try to improve upon their service delivery to their retail banking consumers and ensure that they are able to retain loyal and satisfied consumers with them by providing them attentive and priority customer care services. UAE banks have witnessed a steady improvement in deposits during the first quarter of this year, partly reflecting regional turmoil. International organizations such as the International Monetary Fund (IMF) and the Institute of International Finance (IIF) say that the UAE enjoys a safe-haven status in the region in the context of political uncertainty in some of the Middle East and North African (Mena) countries.

At the same time Banks seek safeguards for credit defaults as the loss on account of credit default by credit card loans are mounting. The DUBAI Federal authorities are drawing up contingency plans to protect banks and workers as retrenchments caused by the global financial crisis lead to more defaults on loans and credit cards. Several banks have urged the federal Government and Central Bank to introduce measures for resolving credit disputes, as the squeeze on the country's financial, property and construction industries leads to job losses.

Most UAE banks have toughened up criteria for lending, with discriminatory criteria set for different nationals like fixing a minimum monthly salary limit of Dh8,000 (US$2,175) for a credit card. Qualifying for mortgages and personal loans is even tougher. But the banks, which had been giving loans and credit cards to people with monthly salaries as low as Dh3,000, may be fighting an uphill battle against credit defaults. Despite having agreements with credit collection agencies in countries such as India and Pakistan, UAE banks are sometimes reluctant to refer cases to them. There are a lot of factors involved here. Banks have to consider the ratio of collection against the costs involved in recovering the amount.

Questionnaire
1. Please Enter Your Contact Details Name ___________________________________________ Telephone _______________________________________ Email ___________________________________________

2. Gender: Male / Female 3. Age Group: Less than 21 22 30 31 40 41 50 51 60 61 70 Above 70 4. Occupation: Self-employed

Manufacturing Retail Student Service

5. Monthly income: Less than Rs 5,000 Rs 5,000 Rs 10,000 Rs 10,000 Rs 20,000 More than Rs 20,000 6. Monthly expense: Less than Rs 3,000 Rs 3,000 Rs 6,000 Rs 6,000 Rs 10,000 More than Rs 10,000

7. Which of the following modes do you usually prefer for making payments? (Multiple choice) Credit Card Debit Card Cash Cheque 8. The reasons you would prefer the use of a credit card over other sources of personal finance are...? (Multiple choice) Ease of obtaining loans Convenient access to liquid cash Loyalty incentives 9. Which of the below banks credit cards do you use? (Multiple choice) HDFC Bank ICICI Bank IDBI Bank HSBC Bank Others _____________________________

10. Which of the following factors have influenced you to prefer your chosen credit card(s)? (Tick mark again each factor for the respective bank)
Factors

HDFC ICICI

IDBI

HSBC

Others

Low interest rates Exclusive rewards using purchase points and loyalty programs Cash-back schemes Roadside assistance access during emergencies Special discounts at selected global and/or local retail and fine dining outlets and/or travel privileges Higher cash withdrawal limits Customer care services putting you first / timely complaint and query resolution and/or maximum convenience Wider range of exchange outlets to pay your credit card bills

11. How frequently do you use your credit card? (Select any one) Any purchase Only week-end shopping Only air-ticket booking

12. For which of the below payments do you use your credit card? (Multiple choice) Shopping Entertainment Dining Leisure Travel Education Utility Bills settlements 13. With respect to settling your credit card bills every month, which of the below approaches have you more or less adopted? (Select any one) Less than the minimum payment required Minimum payment required only Full repayment within 50 days of purchases, interest-free Fixed payment every month 14. Please state the problems you have encountered with your credit cards? (Multiple choice) Lesser acceptability at retail outlets Frequent out of service in ATMs Hidden financial charges Difficult to qualify for an initial credit card Poor customer service

Thank you