Credit card companies back in business


Credit card companies back in business
Bangalore: As the financial market is getting out of recession, credit card issuers have started wooing customers with new offers. Citi Bank has come up with offers like save upto 25 percent on room tariffs at 71 hotel chainsacross the country; enjoy a 15 percent discount on SpiceJet online bookings with an HDFC Bank credit card, and get a 10 percent cash-back on your food and entertainment bills anywhere in the country with a Kotak Mahindra Bank card. Cash back offers are the most talking point among credit card holders. In the current situation, most basic and medium-level credit cards today come with such offers. Late entrants, including Kotak Mahindra Bank, have made it a policy to offer cash-backs instead of reward points. Talking to Business Standard, a senior executive at Kotak Mahindra Bank said, "Cash-back offers are popular with medium segment card customers, since the users can clearly see the benefits the cards offer. In reward points, a lot of customers keep accumulating them without putting them to use." There is one surprise feature of the recent growth in in issuances is that a large number of new cards are free for life. Bankers have complained that cards without annual fees are not viable, and some such as SBI Cards have made it a policy not to issue such cards. However, this has not reduced the issuance of free cards. In fact, some banks such as HDFC Bank have gone in the opposite direction and waived the minimum use requirement on free-for-life cards. Others such as Standard Chartered Bank are offering free-for-life Platinum credit cards. Pralay Mondal, Country Head, Retail Assets & Credit Cards, HDFC Bank said, "Once customers become used to a free-for-life credit card, it is not easy to bring back fees. Fees only work for high-end cards, which come with a host of value-added services, but these cards are a very small percentage of the total base and account for an even smaller percentage of revenues."