Shopping Credit Cards In High Demand Amongst Home-Bound Indians: BankBazaar


Posted May 28, 2021 by raush7

ACCOUNTED FOR 35% OF TOTAL APPLICATIONS IN FY21 AS METRO AND NON-METRO CONSUMERS INCREASINGLY TOOK TO ONLINE SHOPPING

 
Mumbai, May 28, 2020: BankBazaar.com, India’s leading free credit score provider and online financial product marketplace issued a short report on credit card trends in FY21. The report indicates that people have been doing a balancing act – keeping their discretionary spends low while trying to balance safety and security. Driven by the necessity of online shopping for essentials, food delivery, and entertainment, shopping cards continued to do strongly throughout the year, and accounted for over a third of the applications (34.6%). In the last quarter, they became the most sought-after cards for close to 42% of credit card applicants as inflation increased and people tried to get the maximum value for money.
Surge In Credit Cards In Non-Metros
As entire cities and towns came under lockdown, the dependence on online shopping during the last one year was felt strongly across the country, even in the non-metros. Thanks to regulatory relaxation around KYC norms, it became easier for issuers to service customers in tier 2 and 3 cities. Consequently, the demand for credit cards from the non-metros continued to peak. The contribution of the non-metros increased during FY21 to 35% of the overall applications, up from 24.8% in FY20.
Jump In Share Of Shopping Cards
Adhil Shetty, CEO, BankBazaar, said, “The credit card data indicates the maturity of the credit card users in India. Indians today believe that online and digital will continue to remain the only safe way to shop in the near future. The jump in the share of shopping cards from 30% in Q1-3 to 42% in Q4 indicates that people are looking to pay for essentials, entertainment, food delivery, and more in a way that gives them additional benefits. Going forward, the emotional and economic costs of the second wave will have an impact on how people spend and provision for the future. However, one thing remains clear, Indians have adopted the credit card and every benefit it has to offer, and we will see more planned spending in the coming days.”
Surprisingly, Big Growth In Travel Credit Cards
The biggest surprise was travel credit cards, which constituted 25.6% of the applications in FY21, up from 17.13% in FY20. Travel cards became a valuable currency in the last one year due to the benefits such as discount on base fare, priority check-in, free airport lounge access, onboarding privileges, which eased travel woes of people who needed to travel for work or personal reasons in the last year. Moreover, in the last quarter especially, the expectation that the pandemic was easing resulted in people feeling optimistic about being able to travel after having been cooped up for close to a year. Consequently, this quarter alone contributed to 41% of the applications for travel cards.
Pragmatism also came into play in case of fuel cards. Buoyed by the high fuel prices, fuel cards also made a strong come back in the last quarter, accounting for 6.3% of applications in that quarter, taking the annual contribution of fuel cards to over 5%.
Lower Discretionary Spends Hit Lifestyle Cards
On the flip side, higher annual costs coupled with plummeting discretionary spends and little to no enthusiasm for rewards such as movies and fine dining, pulled down the demand for Lifestyle and Premium cards. Lifestyle card applications plummeted from over 40% of total applications last year to a little over 33% this year.
Among the age brackets, applications from the under-25 segment saw a big dip. The combined impact of last year’s recession followed by the pandemic drastically affected this new-to-workforce segment. Job losses and salary cuts at one end and tightened credit policies at the other resulted in a drop of more than 50% in the under-25 segment.
BankBazaar.com is India’s first neutral online marketplace that gives instant customized offers on loans and credit cards. It also provides customers free consumer credit score on its portal. Over 50+ of India’s leading financial institutions have chosen to integrate themselves with the platform. BankBazaar has so far raised USD 116M in funding from investors such as Experian, Eight Roads, Sequoia India, Walden International, WSV, and Amazon.
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Issued By Raushan Pandey
Business Address Module No:601-604, 6th Floor, Ticel Bio Park Phase-2, No:5, CSIR Road, Taramani, Chennai
Country India
Categories Banking
Tags credit cards , High Demand , Banking , COVID-19
Last Updated May 28, 2021