The StanChart gambit is suggestive of the fact that the credit card pricewars have begun in right earnest. A few months back American Express TRS didthe same by offering balance-transfers at 1.45 per cent upto May end. Theother major card issuers may follow suit in due course if these moves resultin business shifts.

Says StanChart's head-consumer banking (India), Harpal Duggal: "The reducedrate of 1.75 per cent will be offered to all new customers who sign up forour global card. Existing customers, too, will get the benefit of thereduced rate, but only on new fresh purchases put through their cards. Theywill continue to service their earlier liabilities at 2.95 per cent."StanChart's new scheme, to be on offer soon, forms part of its credit-cardmarketing strategy for 1999-2000.

The move is seen as enabling StanChart to further consolidate its positionas a strong second in the credit-card business with around 500,000cards--behind market leader Citibank.

While Citibank has issued over a million cards, noteworthy is the fact thatnearly a quarter or so of this is accounted for by Diners. This givescredence to the oft-repeated StanChart claim that its market penetrationlevel is higher than Citibank's despite the latter's headstart of almostfour years.

"We are looking at consolidation--inducing customers to use StanChart's cardrather than carry multiple plastic issued by competition. Some others haveintroduced a balance-transfer facility to acquire business. In our case,this is not so", Duggal said in response to a query as to whetherStanChart's move was provoked by Amex TRS' decision to offerbalance-transfer at 1.45 per cent.

Amex TRS' head of public affairs & corporate communications, Sujit Mitra,however, said that "the decision by StanChart to go in for a reduced rateconfirms that they had priced themselves high. Amex TRS is pleased that itsmove to offer the balance transfer at a lower rate has induced StanChart tofollow suit, reaffirming that Amex TRS sets industry standards".

In recent times, both StanChart and Amex TRS have claimed that they have gotover 50,000 applications after the launch of their respective global anddomestic credit-cards. Not be left behind, State Bank of India, too, hasclaimed likewise: "We have got over 50,000 applications, and are nowextending our reach to Calcutta, Ahemdabad, and Indore after the fourmetros, Chandigarh and Hyderabad", State Bank's chief general manager (cardunit), GSR Anjaneyulu, said. However, not one card issuer has said that ithas seen a shift over to either Amex or StanChart after its balance-transferand global cards were announced. No shift to SBI Card has been reportedeither.

The fight for card-spends is getting hotter, and homing on a well-spendingclientele is the name of the game as opposed to merely issuing cards andtotting up issuance-numbers. But is everybody thinking of reducing interestrates on card outstandings to boost spend-volumes and corner marketshare?Not really.

Says HSBC's head of credit card operations (India), Vivek Kudva: "We havealways been competitive. Our rates were always the lowest compared toothers". As against Citibank's 2.95 per cent per month on `Gold' and`Classic' cards, HSBC has pegged its rates at 2.75 and 2.50 per centrespectively. Others like StanChart and ANZ Grindlays Bank charge 2.50 percent on their `Gold' cards and at 2.95 per cent and 2.75 per cent for`Classic' and `Executive'.