Recession is here.. Credit Card Debt at all time high - Will banks devalue offerings or push more credit / debt

[Zacobite]

Any thoughts? Will more people buy more using CCs and go deeper into debt..or will banks push more to sell if people are paying back in full

 

[Chaitanya-a]

Not in India. Even credit card usage is far less in India. So this question isn't relevant as of now.

 

[iamabhisekagar]

Our Banking systems are very robust... whatever happens outside it won't affect Indian Banks...but sure as Customers are getting smarter day by day, credit card devaluation is bound to happen but gradually

 

[Zacobite]

Not in India. Even credit card usage is far less in India. So this question isn't relevant as of now.

Credit card outstanding rises 29.6% to reach record high level in January

As per the latest data of the Reserve Bank, the credit card outstanding has recorded a growth of over 20 per cent in the 10 months of the current fiscal.

www.moneycontrol.com

 

[Zacobite]

Not in India. Even credit card usage is far less in India. So this question isn't relevant as of now.

Lets wait and watch..Debt is increasing.. that is fueling businesses like hotels, vacay, phones, white label goods etc, when spending power goes down, as CC limits get used up.. and no jobs to jump around with.. it will show.. we are already seeing layoffs.. reduced spending.. infact yesterday there was an article saying people are even buying lesser groceries now.!! Fingers crossed...

 

[Wealth is my birth right!]

Any thoughts? Will more people buy more using CCs and go deeper into debt..or will banks push more to sell if people are paying back in full

In India still majority of the population are not using cc
That may be a global scenario

 

[Souvik]

Lets wait and watch..Debt is increasing.. that is fueling businesses like hotels, vacay, phones, white label goods etc, when spending power goes down, as CC limits get used up.. and no jobs to jump around with.. it will show.. we are already seeing layoffs.. reduced spending.. infact yesterday there was an article saying people are even buying lesser groceries now.!! Fingers crossed...

Talking about debt purely, in terms of instant loans, easy loans, cheap credit has spoiled Indian consumer. Unlike US we cannot print money whenever we want to bail out defaults.

Indian banks will continue to push as much credit as they can to trap more assets for interest, that's their business model. But as interest rates go up, it remains to be seen whether people would be able to cope up with the increased EMI. I foresee foreclosures in housing and cars bought with cheap money in the next few months. Layoffs are already in place.

Case in point: Even now that interest rates have risen, I see huge demand for new private cars, fueled by cheap credit where India is majorly a poor country. Even if you look at luxury brand sales, they have shot up post covid all due to cheap credit.

This will have a hard landing with rise in interest rates to tame inflation and rising EMI's. US has infused record dollars into world economy during covid, which has flown over to middle income countries like India resulting in irrational purchases.

Even today a hard landing is necessary to cool off the market and price rise, be it a recession or slowdown.

 

[Zacobite]

Talking about debt purely, in terms of instant loans, easy loans, cheap credit has spoiled Indian consumer. Unlike US we cannot print money whenever we want to bail out defaults.

Indian banks will continue to push as much credit as they can to trap more assets for interest, that's their business model. But as interest rates go up, it remains to be seen whether people would be able to cope up with the increased EMI. I foresee foreclosures in housing and cars bought with cheap money in the next few months. Layoffs are already in place.

Case in point: Even now that interest rates have risen, I see huge demand for new private cars, fueled by cheap credit where India is majorly a poor country. Even if you look at luxury brand sales, they have shot up post covid all due to cheap credit.

This will have a hard landing with rise in interest rates to tame inflation and rising EMI's. US has infused record dollars into world economy during covid, which has flown over to middle income countries like India resulting in irrational purchases.

Even today a hard landing is necessary to cool off the market and price rise, be it a recession or slowdown.

True that!! hacks or no hacks.. only spend on what you really need..