Latest Posts
Home > Debt Articles > New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit

New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit

But the most visible stress is on the cardholders, and it’s showing up in headlines, in call-center employees under crushing debt, even in a new Bollywood movie about middle-class people struggling with credit.

Consumer credit, whether cards or car loans, is relatively new to India. Fifteen years ago, even home loans were hard to come by. As regulations on lending were relaxed and India’s urban middle class swelled with 20-somethings hungry for the latest cellphone model, credit expanded to meet the need.

Banks went too far, analysts say, issuing cards indiscriminately to people in rural areas and lower-income groups without regular salaries. The number of credit cards in India, while still only a fraction of the population, has more than tripled in the past five years, to almost 30 million. In the year ended March 31, Indians charged more than $14 billion on their cards, more than three times the amount charged four years earlier.

The amount of unsecured loans and credit-card receivables more than three months overdue is about 7% to 9% of total loans outstanding this year, and is about to head as high as 15%, according to ratings agency Crisil Ltd. in Mumbai.

More people are turning up desperate for help with their credit-card payments, says V.N. Kulkarni, chief counselor at Mumbai’s Abhay Credit Counseling Center, which advises borrowers. Hundreds have been lining up at the center, dumbfounded by their debt and asking the most basic questions.

“They are unaware of the charges, unaware of the interest rates,” Mr. Kulkarni says. “They just take the money because it is freely available.”

It’s tough all over — and not just in the United States. In India, where revolving credit is still relatively new, consumers are struggling under the weight of crushing consumer debt, according to a story in the Wall Street Journal this morning. But it’s not just Indian consumers who are suffering. The banks that handed out this easy money are being hammered as well. Indeed, card companies that

Click Here for totally free debt help, advice and answers.

Read the rest here: New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit

New Indian Middle Class Gets Caught In the Whirlwind of Revolving Credit by

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.