- What goes in credit-score & what doesn't ?
- What kind of transactions count more?
- Should we do fewer bigger transactions or many smaller ones?
- Does paying off loan quickly helps?
- How does compounding principle helps?
- Should we possess multiple credit cards of smaller Credit Limit / fewer ones with impressive limit?
All in all, it was an interesting exercise that kept me occupied in last Qtr of 2007. Finally, when I extracted my score from FreeCreditReport, I wasn't thrilled at all. I couldn't crack the 800 barrier in 7 months of my spending spree but then I consoled myself by thinking that I should probably not worry so much about attaining first Credit Score as perfect for all it does is expresses my creditworthyness in financial world (Credit Card Companies to be specific). And since I pulled my score, I have been inundated with Credit Card offers from A, B, C & god knows every possible credit card co - which is certainly a feel good factor if ur sore is less than 800. Indian Bank's Association [IBA] has realised that India needs an inhouse credit card payment system now. In recent years, the growth of credit card companies & credit card holders in India has been phenomenal indeed, Have a look at the following stats (I read on RBI's site) :
"The total spends at point-of-sale terminals crossed Rs 55,000 crore (Rs 550 billion) in 2005-06, with the issue of 18 million credit cards and more than 60 million debit cards. Almost, every transaction involved the payment of a settlement charge to MasterCard or Visa, which amounted to about $50 million during the year."
Thus, a domestic card payment system (IBA proposes IndiaPay) will certainly save the outgo on the commissions paid to VISA & MasterCard etc for domestic transactions to start with. A wonderful idea indeed. In addition to savings commissions, I can foresee following benefits right away:
- Data Mining & Tracking: Data Mining is very crucial since one gets to learn the trends of people spending money in a geography. With IndiaPay system, government can track & later analyse such patterns and base their decisions of taxation etc based on the same.
- Customer remains the King: With advent of IndiaPay, almost immediately VISA/MasterCard will reduce their transaction fee (they hardly have any competition right now) and that is certainly a win-win situation for end customer & government too.
- Inter Bank Transaction Switch: Development of such a (complex) system will open up new avenues, new set of challenges and facilitate even more transparent inter-bank communication.
- Backbone: IndiaPay system can eventually be made as a backbone for their e-transactions like Mobile Money Transfers, Card-to-Card transfers & other micro-payments etc.
I sincerely believe that in additon to cost cutting advantage this system would certainly promote growth of several ideas towards pumping up India's Financial growth in the years to come..! Njoi this video for now..!