More Indians Buying Expensive Items On EMI, Credit Card; 70% Are eShoppers (HDFC Report)
Credit card usage is reportedly at all-time high during the virus spread as several customers are preferring to buy high-value products through instalments according to the country’s largest private sector lender HDFC Bank.
What Does The Country’s Largest Lender Say?
Despite the concerns raised about asset quality given the high job losses and salary cuts, HDFC Bank head of consumer credit cards and digital acquisitions, Angshuman Chatterjee said that it is “bullish” on the credit card equated monthly installment (EMI) products on September 8.
For providing an EMI product, HDFC Bank ties up with merchants or product manufacturers to help a customer get a cheaper deal along with the ability to spread repayments over a period of time.
This segment reports a severe increase in demand in the current economy, which has been driven by consumption in the past few years.
Mr. Chatterjee said, “Credit card EMIs are at an all-time high. So, customers are choosing to do larger spend by breaking them up into simple EMIs. That is helping the consumption,” in a video message for bank employees.
The trend is visible across all segments of cardholders, including the newly launched millennia cards targeted at the younger users, he added.
As for the ‘millennia’ line of cards, which was launched in August 2019, he said that the bank has added 15 lakh customers having the credit, debit and prepaid cards as against its target of reaching 20 lakh customers in two years.
Now, ‘millennia’ is driving a bulk of new card acquisitions and accounts for a big part of the customer portfolio.
According to him, the proportion of cards sourced digitally in the new line is three times that for others.
Increase In E-commerce Users
There is also a remarkable increase in e-commerce users as Mr. Chatterjee said that over 70 percent of its customers are right now using e-commerce as against 47 percent earlier,
Clearly, this shows a shift to online shopping during the pandemic.
He also mentioned that there is an urge to travel and do other discretionary spending among the customers, but access is an issue because of the restrictions imposed to contain the infections.
According to Mr Chatterjee, once the restrictions are lifted through things like the arrival of a vaccine, there will be a tremendous rise in consumption.