We should have defined the definition of POOR here for this debate. If we are talking of person with below average income level in India or person who don't have job, not have money to make up for his livelihood. If the person is in first category who earns but is below average income group then CREDIT FACILITY will definitely help him and work as one of the strongest tool for him….like his need would be to pay for school fee for his kids, loan for farming, marriage in family….he will be in position to manage the funds. Currently he take funds from lender who charge him 36 – 48% for his requirements…hope it won’t be too high for credit cards. If your definition for poor is of second category then company are smart enough not to issue the credit card for these kind of profile. Who don’t require funds in current scenario, from top to bottom, people from every segment take loan/ credit to manage their day to day need then why people who are earning Rs. 3000/- to Rs 4000/- shouldn’t be extended this facility. Defaulters are from every segment be it SEC A or SEC B, but you have to accept that financial planning of SEC C are far better than other categories, they know their limits and manage the funds accordingly. If somebody want to cheat intentionally they nobody can stop them, YES THERE SHOULD BE LIMIT TO CREDIT BASED ON THEIR PROFILE.
By
Himanshu Jha, Head/VP/GM-Client Servicing, Crayons Advertising Limited
| 03 20 2010 09:21:57 +0000
We all have written essay in school on Science being a boon or disaster and same goes for credit cards. If some one says Credit Cards will push poor in debts further, than I do not find it logical. Judicious use is recommended, and if used Judiciously it could be a wonderful tool for poor to manage and maintain liquidity.
By
Prassan Kumar Sharma, AVP, Nirmal Bang Securities
| 01 26 2010 21:05:03 +0000
Issuing authority of the credit card will be fixing the credit limit to the card holder, there is no lower limit fixed for issuing credit cards, they may fix nominal credit limit to the card holder. Normally credit cards are issued to credit worthy irrespective of the fact that wether they are rich or poor, but these cards are issued less in number when compared to other class. It can be issued to poor class too if they found that they are credit worthy. RBI did not draw any cut of line between the poor and rich for the purpose of issuing credit cards, its only the business policy matter of the issuing authority.
By
RAMANATHA PRABHU N, Chartered Accountant
| 01 07 2010 07:55:40 +0000
I think it work for poor provided credit worthiness is followed properly. Instead of unsecured card, secured card will be an option. It can be linked to either fixed deposits, kisan vikas patras or jewels.
By
RAVI P, Zonal Head, Private Bank
| 01 01 2010 15:03:46 +0000
Credit card is certainly useful for poor, provided if it is designed for poor only. Banks can provide subsided interest and easy revolving credit facility. More importantly, people should be educated on the usage, benefits and de merits of credit card, than only it works. Why poor people only get into debt traps, even so called educated people also get into debt trap if not used properly. By. Manjunath - Finane Manager
By
MANJUNATH , FINANCE MANAGER, AL-JAZEERA REAL ESTATE DEV. CO. LTD, KUWAIT (MIDDLE EAST)
| 11 03 2009 13:23:14 +0000
Credit Card being a facility to manage cash on credit can be extended to anyone who has proved his creditworthiness. The very objective of a Banking Institution is to help the needy by making the surplus deposits available for those facing deficit. With creditworthiness and Security of lending as the criteria, Banking Companies can formulate policies and extend help in improving the living standards of the masses. Defaults are not associated with the poor alone! There are poor who are very particular of honoring commitments and rich who are not! Therefore Credit Card should not be a product meant exclusively for the RICH.
By
Resmi Maxim, GENERAL MANAGER - OPERATIONS, SI PROPERTY (KERALA) PVT.LTD.,
| 10 29 2009 12:38:56 +0000
Yes it will be helpful to poor but who is going to provide them credit cards. It may be noted that farm loan too is limited to paperwork by many big banks as results farmers has to knock the door of local money launder & incase of crop loss they do suicide. Thus credit cards to poor I think a wishful thinking though if happened in reality will help the poor immensly.
By
Biranchi Narayan Acharya, Chief Manager (Projects), Simplex Infrastructures Ltd
| 10 29 2009 11:12:42 +0000
credit cards are useful to the middle income people than poor. The rate of interest is high in compare with banks, it can be useful for purchases and in emergency. credit card will work for poor if the services charges and interest to be reduced as per with bank interest.
By
venugopal , Legal Advisor, private practice
| 10 28 2009 14:26:52 +0000
Credit card is useful when used under control. In any way poor people take loan from the money lenders on per day basis or monthly basis and the rates are very very high when compared to bank rates and credit card rates. Credit card with appropriate limits will be helpful as the poor will be able to access / afford the desired goods with easy installments.
By
BISWABHUSHAN BEHERA, Dy. Manager (HR), GAIL (India) limited,
| 10 28 2009 09:17:05 +0000
It will be helpfull for poor people also, when they credit under control. If they use in proper way even the poor people also can benefit from the credit card. For example, my monthly income is only rs.5000/-, and I am in argent need of rs.20000/- purchase. then I will purchase what I want and will be paid by EMI. If credit card not available then I go to some landlord and borrow the money pay the huge amount in interest. The credit card means for every body is help ful when it utilizes properly.
By
Chandramouli , Sr. Manager - QS & Contracts
| 10 28 2009 07:33:24 +0000
I think it will work for the poor. The poor people cannot buy many products because of lack of money at that particular time. With the help of credit cards, they can buy the product and pay the load later slowly and steadily.
By
Swati Raut, Product Manager, Aviva
| 10 26 2009 14:12:15 +0000
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Poor will keep paying interest alone for a few generation and then they will tke anew loan to pay that interest they will end up in vicious debt trap
By
Nikhil , Senior Manager, Insurance
| 07 05 2010 07:55:26 +0000
I agree with you Vineeth, credit cards will not help the poor. Even the people who use it are also not aware of how to use it. So we should educate the poor about the credit card, its advantages and how to use it effectively. Then we should cut down some rates to make them use it. Then it will work for poor. As of now they will become more poor if they use credit card. :)
By
Esha Johar, Risk Analyst, Irevna
| 02 16 2010 08:28:48 +0000
Many have said the correct point! Credit cards are not meant for or helping the poor. It is not a tool for poverty eradication as banks lend those monies borrowed from the deposit holders! hence unlike our government, Banks can not write off the debts. One must also understand the origins of the credit card and its target audience better. With high interest rates and the unscrupulous methods many card issuers use to rake up higher revenue, it might be a social menace too. One must use credit cards sensibly then the benefits are worth talking about.
By
Vineeth K Bhat, Director & CEO, Ara Management Solutions Pvt Ltd
| 01 06 2010 19:43:55 +0000
No because now the banks are raising the interest rates to up to 23% over prime. If you have good credit, you probably do not need to go and borrow on a credit card and if you have poor credit, if granted; you will be making "interest only" payments on what you borrow. If you look back into the 80s when mortgages went up, the same thing happened; most of the money paid was interest and very little to principal so the individual debt compounded. This does nothing for the individual and only for the lender. The best approach is to cut back, downsize, and live within one means. I have a decent living but, have cut back and refused and canceled the credit cards that have changed the interest terms. I have told them it does not harm my credit to get rid of their card as my oldest cards are not doing this thing. In the US, they just passed the law on the payday loan companies so only a certain dollar figure or percent, whichever is less is allowed to be lent and the financial institution is held responsible for keeping track of the monies in a database. Unfortunately, there are those that just do not manage money well and rather than give more means for harm, we need to control access, educate and stop the impact on the family from reckless spending.
By
Preacher , collector
| 01 03 2010 19:42:52 +0000
If credit card will started to be worked for them then why they have been called as 'poor'?Bank gives credit card on basis of credit worthiness of customers.Bt on which basis they will give to poor?In economics,who stays below poverty line they are called as poor.so do u think such people will be enough literate to know about all uses of credit card?will they able to get credit card from banks?so such thoughts rather imagination is very much invalid.
By
roumi chatterjee, asst commercial executive, century plyboard india ltd
| 12 23 2009 12:34:10 +0000
I dont think giving credit card to the poor will work. Almost most of them may end up in further debts and may create headaches to organiztion issuing the credit cards. In fact credits should be given on the lines of Grameen Bank which has become a great success in Bangladesh
By
brian crasto, Analyst, indiabulls securities
| 12 23 2009 10:34:40 +0000
When the credit cards are making even the rich turn into poor due to their charges and hefty 40% plus interest definitely the poor will be forced to commit suicides with so many hidden charges and compounding fines, penalties and interest rates.
By
Prasad PN, Zonal Sales Manager
| 12 01 2009 12:14:53 +0000
I SUPPORT TO NO B'CAUSE 1. RATE OF INTEREST OF CREDIT CARDS ARE TOO HIGH (3.5% PM) COULD NOT AFFORDABLE BY A POOR IN ANY CIRCUMSTANCES. 2. LATE FEES IS TOO HIGH, NOT SUPPORT TO A POOR ONE 3. CASH WITHDRAWAL FEES IS 2.5% IS TOO HIGH. FEES 2.5%+3.5% INTT=6% RATE OF INTEREST IS NOT POSSIBLE EVEN FROM A RICH ONE. 4. A "MAHAJAN" IS BETTER THAN A CREDIT CARD TO POORS.
By
Surendra Pal Singh, Head/VP/GM-Accounts, D. K. Fine Art Press Pvt. Ltd.
| 11 06 2009 10:08:28 +0000
credit card will not workout farmers, because in India most of farmers below poverty level . Initial stage they enjoy the credit card facilities very well, but in latter days they will not be able to re pay it properly and it will become miserable to them' and finally banks will not able to recoup the money from them.
By
ajith divakar, ufc, unit finance controller IN ITC group
| 11 03 2009 13:58:51 +0000
Poor people cant afford to pay the bank interest charged on credit cards.Now a days normal person is unable to pay then how can a poor person pay for it and more over they dont have much knowledge as how to use credit cards .If a poor person takes credit card also he can use it in shopping malls, super markets etc.., where these days a normal middleclass person is not at all willing to go to super markets and buy the product then how can a poor person visit a super market. visiting to super markets for a poor person is beyond to his level of income. If credit card transaction facilities are available in general/kirana stores and whole sale stores then some poor people may opt for credit card facility. If the shop owner doesnt charge extra amount for the credit card service.
By
shilpa , MBA/PGDM student, St.Ann's PG College
| 11 03 2009 11:18:33 +0000
No i dont think credit card will work for poors poors may use credit card for prcocuring things that are not essential which results in financial problems in future as there financial capacity do not permit them to procure these things and they may become habitual to these things.
By
GIRISH MAHADEO SURVE, Accounts Executive/Accountant, PAN INDIA NETWORK LTD.
| 10 29 2009 14:32:42 +0000
First of all are credit cards given to the poor? If so then who is called as poor??? To get a credit card a person should match the income criteria, age, bank statements previous loans etc... If everything is matching as per the guidelines why is he called as poor?
By
Sunil S, Business Development Executive, Strategic outsourcing
| 10 29 2009 14:05:26 +0000
If they provide with the credi card it means giving an opportunity for the people where they have to think of there spending abilities more over if they utilise the credit card it will be a burden if they can not repay the money on time and the interest will be levied for the non payment and late payment. So the bank should think before providing the credit card for those people who belongs to the lower income for the good of the individual and their family.
By
Deepak Sreenivasagopala, HR , ANTS Studio Private Limited
| 10 29 2009 09:23:11 +0000
Credit card will not be useful for poor people and there is a chance to misuse. They are not perminent / monthly money income holders. they may not return money to the bankers intime. So Public money will loss and it gets effect to the bankers revenue income got effected loss. I personally fee it is not suggested to give credit card to poor people.
By
haranath pelluri, Senior Manager, M/s. Lanco infratech Ltd
| 10 29 2009 06:25:06 +0000
well , i am continuing the argument that it might help farmers, not for payment of fertilizers or other investment purpose 'coz for investment purpose he can always go to bank for a loan (may be micro credit ?) . but it can help him in consumption and anything used for consumption cannot be productive to repay credit card debt. more over interest rates of credit cards are nearly 25 % (still it is on lower side). If poors can effort such rates , then govt should not worry about lowering interest rate for investments. credit card is neither good for investment (due to high interest rates) nor good for consumption purpose (will put you in debt which you can never repay)
By
achal , na, na
| 10 28 2009 23:17:54 +0000
certainly its a problem. the one who cant afford their needs is consist as poor. so the money circulation by means of credit cards is certainly risk for them. More over the burden of hidden charges and the settlement fees are also high for the poor or those who cant afford their needs. So the real practiclaity is "credit cards are not going to help the poor"
By
Dhesihan S, Executive - HR, East coast construction & Industries ltd
| 10 28 2009 06:55:51 +0000
Credit card will encourage a poor to buy fancy products which in fact none of his actual requirement. Its better to provide RATION CARDs so that they can have food articles cheaper than market prize. This would be exact help to the poor. Credit cards are for rich not for the poor....
By
Gurmeet Singh Lamba, Branch Manager, Taurus Asset Management Company ltd
| 10 28 2009 05:06:49 +0000
It will not work, why because, former can get income only at the time of yielding, we cannot expect from nature things yield should be available before the due date of credit card. Salaried person can plan accordingly and go for purchase, even businessman can plan accordingly, these two categories having money spinning capacity, whereas formers concern they don't have that capacity, their only source is to get good yield from the agri land.It's only posibility is to increase the credit free period to 115 days especially for farmers. Because agriculture is timebound process
By
prabakaran , Executive-Accounts and administration, Aba
| 10 28 2009 05:02:41 +0000
Yes, I completely agree to the view that credit card will be a problem for the poor. Poor people are more in need of finance as imbalance between their income and expenditure is heavy. When given things like credit card they will be burried in loans forever. Credit card means easy finance now and repayment in future. In these circumstances normal tendancy of anyone is to spend more than he would have spent otherwise. So when it comes to repaying, it will be allthemore burdensome for a poor person.
By
Anjali , Assistant Manager, Automag India Pvt. Ltd.
| 10 28 2009 04:12:39 +0000
Who says credit card sales are booming ? A majority of banks have put a hold on new aquisitions, made credit policy more tight and have in fact cut down on earlier given credit limits. SBP is already running a gold card scheme wherein by pleadging your land to the banker, the farmer gets a gold card which can be used as a credit card. Just go across to them and ask the limits utilized. They'll tell you 100% utilization of the limits. Just that it has replaced the artiya (comission agent). What is actually required is consolidation of small holdings the way say Pepsi foods is doing wherein they give a fixed return to farmers on their produce eliminating all middle agents. All seeds, fertilizers, etc is given by the company in turn offerring higher returns to the farmer than what he would have got from middlemen. On a standalone basis, given the small landholdings, there is no survival for the farmer who also does not know how to plan for his finances.
By
Vivek Bimbrahw, SBU/Profit Center Head, ICICI SECURITIES LTD
| 10 27 2009 06:46:53 +0000
No, I don't think so. They will suffer more because of the interests generated by credit cards. They won't be able to afford the overall amount and will lose their possetions to the company. Many cases of losing everything because of loans have come into news...
By
Anagha Thakur, Corporate Lawyer
| 10 26 2009 14:10:46 +0000
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