Man Blacklisted From Availing Loans Due To Low Cibil Score
A man named Yogesh Bhatia from Mulund has been blacklisted by banks from availing loans after fraudsters use his details to get loans and credit cards. Bhatia got to know of the fraud only after his bank sent him a letter stating that his account has been freezed, after it had received complaints from another bank over his non-payment of EMIs for a two-wheeler. The man who works as a logistics professional on informing that he had not brought any two-wheeler led to the discovery that his identity had been used by fraudsters to avail multiple loans from several banks. The total outstanding dues in the name of the person was found to be Rs.6.5 lakh, which resulted in his CIBIL score going down and being blacklisted by banks. The man filed a police complaint at Powai police station citing that it was a case of identity theft, however, the police refused to file an FIR regarding the matter. It needs to be mentioned that the police had sent across a circular to all the concerned banks informing them of the development.
27 July 2018
India’s Untapped Credit-eligible Market Provides Growth Opportunities For Lenders – Cibil
Credit information company, TransUnion CIBIL, conducted a study on India’s untapped credit-eligible market to unveil surprising facts.
The study found that of the total 220 million credit-eligible consumers in India, only 72 million are currently credit-active with a live bank account, while the remaining 150 million don’t even have a bank account. The non-active segment, most of which meet the age and income requirements, has a potential to become retail credit borrowers, added the study, opening significant growth opportunities for retail lenders.
The research also found that majority of the non-credit active population includes both the consumers who were once credit-active but are not currently as well as those who never availed any loan or credit card.
As per the study, if most of the non-active consumers are added to the retail lending market, lenders can expect significant growth opportunities for various credit products including loans and credit cards.
Vice President of the research firm further added that the non-credit active segment provides an opportunity for growth for retails lenders over the next five years. He further advised banks and other financial firms to find ways to reach the untapped segment, which does have credit needs.
The report also included information about the household debt levels in India compared to other developing countries. Compared to China, Brazil and South Africa, the household debt levels in India are found to be modest. If the country follows the growth trajectories of other countries, the total household debt is forecasted to increase from Rs.37 trillion in 2017 to Rs.78-94 trillion by the end of 2022. The forecast suggests that the Indian households would acquire an additional borrowing capacity and would increase their finance consumption levels in the next five years.
Besides the lenders, who want to expand their business and customer base, the growth opportunity would also benefit the economy with the millions of consumers entering the credit market, added the study.
24 May 2018
More Than One In Three Credit Card Applications Being Approved In A Day: CIBIL
More than one in three credit card applications are being approved in a day, said Satish Pillai, CEO, and MD of Credit Information Bureau (India) Limited, more known as CIBIL. He added that the banking system was receiving more than 14 million unsecured loan applications every month and new customers held 40% of these applicants. In the first quarter of 2014-15, only 14% of the credit card applications were being approved in a day. However, by the end of the fourth quarter of 2016-17, this has risen to 37%.
Pillai added that the remaining 63% of the applications took more than two days to approve which offers banks and fintech companies more scope to work together and improve customer experience. This, he said, can be attained by decreasing the number of pain points involved in the process of obtaining an unsecured credit line.
8 May 2018
4 Things To Do Before Getting A New Credit Card
While some people don't like getting new credit cards at all, there are a few who love to keep a stack for emergency financial expenses. While there is no harm is owning more than one credit card, there are a few things that one needs to keep in mind before getting a new credit card. It is important to make a note of the pointers listed below before one gets a new credit card:
• Consider how it is going to affect your credit score: If you have a fair credit score, you would want to first work on your credit score before getting a new credit card. This way, you will be able to keep your credit utilization in check and your credit score will also not slide down.
• In case you are closing previous accounts make sure to settle debts: A new credit card means new bunch of debts. In order to avoid getting into a debt trap, ensure that you close your old debts. Settle all your previous credit card dues and close all those accounts before getting a new credit card.
• Compare sensibly before getting a new credit card: Before getting a new credit card, make sensible comparisons between the features and benefits that both the credit card are offering. Opt for a new credit card only if it is going to provide you better rewards and is equipped with superior features and benefits.
• Take a note of the interest rate: Different banks offer credit cards with different interest rates. Before you opt for a new credit card, ensure that the interest rate is lower than your previous credit card or at least matches it. Opting for a credit card that charges a higher rate of interest in comparison to your older card, is not going to help you.
11 April 2018
Why Having A Credit Card Is Important?
There's a common belief that rules the conscience of people across the world-credit cards are synonymous to trouble. However, in current times, credit is treated as king. How often do you hear someone buying a car or a house in cash? If used wisely, one can reap several benefits from a credit card. Not willing to carry cash in one's pockets is the most basic of them all. Listed are below are a few more reasons that will prove that having a credit card is not a bad idea after all:
• Using a credit card can help the cardholder to earn travel discounts. Quite a lot of credit card companies have tie-ups with various airlines, hotels, and even car rental companies. So, when one spends a certain amount on their credit card, they get discounts on availing these services.
• Using credit cards can help one bag reward points that they can redeem in the form of attractive products from the bank's catalogue. Most credit cards come with membership rewards program that the cardholder can make use of.
• Almost all the credit cards available in India offer opportunities to earn cashback incentives each time one uses it. The cashback can be range between 5% and 15%.These offers actually help the cardholders to avail handsome discounts.
• Build a healthy credit score: When used wisely, a credit card can help the cardholder to build a good credit score. A healthy credit score helps the cardholder to avail loans as and when they need it. This proves to be of great help during one’s time of emergency.
• Cardholders can also bag travel insurance while paying for their travel tickets using a credit card. Some credit card companies offer travel insurance that has attractive features like baggage loss allowance, accident coverage, among others.
3 April 2018
Using a secured credit card to build credit score
With credit score becoming an important factor to get any kind of credit line, people who wish to apply for a credit card or a loan for the first time find it difficult to get an instant approval. For all such people availing a secured credit cards is one of the easiest method to build a credit score.
Secured credit cards, unlike regular credit cards, do not require the applicant to have a credit history or credit score. Anyone can apply for a secure credit card provided they can afford to invest in a fixed deposit with the respective bank. The bank considers the fixed deposit amount as a security deposit and offers 70-80% of the deposited amount as credit limit on the card. While a few banks require the cardholder to maintain the fixed deposit as long as they use the credit card, a few others allow the customer to close it after a certain period, say one year.
Therefore, those who want to build a credit score can apply for secured credit cards and use them appropriately to make the most. Making sure the outstanding is cleared on it and the usage on the card is consistent are the main factors affecting the credit score. Taking care of them will help build a decent score in less time.
22 February 2018
The Best Alternative To Credit Cards
Credit cards are great options for transactions since there is no need of carrying cash or worry about exhausting the bank balance. Moreover, the offers, discounts, and reward points also let consumers make cutbacks on their spending. Nowadays, people can apply for loans against their credit cards if they can repay the debt on time. But bad credit score or limited source of income can make a person ineligible for a credit card. as well as the reason that the applicant lives in a non-serviceable area. However, for instances like these, one can also become a cardholder through secured credit balance.
A secured credit card is issued by the bank against the fixed deposit account an applicant has in the particular bank. While the credit limit is usually 80-90% of the amount in FD, most banks allow 100% cash disposal limit. A secured credit cardholder can enjoy, along with the general features of a regular credit card, the advantages of - Building good credit score with regular transactions which also boosts the assets mix. Availing financial access in case of emergencies as the FD account acts as collateral thus providing security against EMIs and loans. The almost guaranteed approval for the card because of lessened eligibility criteria.
7 February 2018
Indians are more inclined towards digital payment solutions: Study
In a study conducted by Global payment solutions company, Visa, in collaboration with YouGov, it was found that Indian consumers are not hesitant to adopt new forms of digital payment solutions as long as they are safe, convenient and efficient.
The study was conducted to know the pulse of Indian consumers and their views about digital payment systems and the country’s transition towards digital economy.
Of the total people surveyed, 78% expressed their inclination towards new forms of payments. 87% stated ease of transition is the main factor that encourages them to use new type of digital payments.
Indian is slowing moving towards contactless payment technology, IoT, simplified and faster e-commerce experience, which define the next wave of future payment solutions.
While people prefer new payment solutions, it was also found that they give more importance to security of their transactions. Almost 80% of the surveyed think about security than convenience while using digital payment modes or making online payments. The opinion has been found similar across ages, gender, income, and education levels.
For the Indian consumers to move away from cash based transactions, convenience, efficiency and speed of transaction offered by digital payment modes are the main reasons, found the study.
Other key findings about the barriers to digital transactions include - merchants accepting only cash, as expressed by 41% people, concerns about security of digital payments, said 39%, and another 52% find modes of payments as key barriers.
Conducted across three countries – Sri Lanka, India and Bangladesh, the study also found that millennials are more likely to do digital payments on a daily basis for shopping at supermarkets, departmental stores, fast food centres, online, and for cab services.
People from the higher income group are found to embrace digital payment solutions compared to other groups.
The cash usage, as per the study, was marginally declined from 33% in 2016 to 31% this year and is projected to come down to 25% over the next 12 months.
Card usage and other digital payment methods continue to rise with the current year recording 36% compared to the previous year’s 34%. It is expected to touch 39% in the next 12 months.
16 November 2017
Credit card usage hits record high in India
The quantum of credit card-users in circulation in India has hit an all-time record, with an increasing proportion of the population using plastic money instead of hard cash.
According to the Reserve Bank of India (RBI), around 29.8 million credit cards have been issued. This figure is true as of March 31, 2017, and is a significant increase to the the previous high of 28 million cards, the figure achieved in March 2008.
The increasing percentage of defaults during 2007-2008 caused a fall in credit card users in India. Post the 2008 economic slowdown, the number further fell to 17.65 million, the number in March 2012. However, since then, credit card usage has seen a rise, and not just in numbers. Values of transactions has shot up correspondingly. By the end of March 31, 2017, spending via credit card was found to be Rs33,619.6 crore which is a 275% jump over Rs.8,958 crore, the figure in March 2012, as per RBI data. This is an indicator that credit card holders are now more inclined to actually use them, something of a rarity in the past.
Reasons for the growth are several – including an increased comfort-level Indian banks have in issuing credit cards to customers due to easily accessible credit scores from firms like CIBIL. Credit scores indicate the borrower's’ financial discipline and possibility of defaulting. Moreover, banks these days have limited issuing cards to their own customers, which keeps them better informed and secure.
What’s helping the most is the e-commerce boom the country is experiencing. With more people shopping online today, usage of digital payments - including credit cards – is now more popular than ever. Add to that the various offers on credit cards which make them all the more lucrative – due to cash-backs and reward programs and credit cards are emerging as a preferred instrument of making payments online. With this boom in people becoming increasingly comfortable spending online, e-payments are estimated to grow by 10 times to $500 billion by 2020, according to a Google-BCG report.
12 June 2017
Things to consider while using a credit card
A credit card is an interesting tool that lets the owner handle and manage regular as well as sudden financial crisis. Currently, the credit cards offer more than the credit itself, factors such as rewards, cashback, discounts, etc. play a vital role in the rise of credit card usage. However, a credit card can become difficult if you are not using it in the right way. If you are a credit card owner, you need to make sure that you are making timely payments to avoid late payment fees and associated interest charges. It is also advisable not to exhaust all your credit as it will reflect poorly on your credit score. You can use any credit card to withdraw cash, however, it will attract cash advance fee and a higher interest rate that could affect your repayment capability. If your credit card offers rewards, you also need to ensure that you redeem the rewards before they expire. There are many more important aspects to safe usage of credit cards that you can follow to make the most out of your credit card.
6 April 2017