The festive season brought robust growth in credit card spending in India. October saw Indians spend more than ₹2.02 lakh crore using their credit cards&mdash;14.5% up from the previous month. This marks a 13% rise from the same period last year, data from the Reserve Bank of India (RBI) shows. Meanwhile, according to Central Bank data, outstanding credit cards in the system increased 12.85% (year-on-year) to 106.88 million, a 0.74% increase from September. This indicates that either credit card penetration has improved, or that existing users are spending more. The month-on-month rise shows that consumer debt grew slightly, either due to higher credit cards spending during festive seasons or for big-ticket purchases, or that users are paying only the minimum amount due, leading to higher interest accrual for credit card companies. HDFC Bank issued 2.41 lakh new credit cards, while SBI Cards and ICICI Bank issued 2.20 lakh and 1.38 lakh cards, respectively. With more and more people moving to unified payments interface (UPI), debit card-based transactions fell almost 8% from nearly ₹43,350 crore in August to about ₹39,920 crore in September, according to RBI data. On the other hand, nationwide credit-card transactions grew nearly 5%, from ₹1.68 lakh crore in August to ₹1.76 lakh crore in September. As per market experts, the growth in credit card spending is driven by a lower base in the previous year and the festival season as there has been an uptick in promotional schemes like equated monthly instalments during the festival season. The share of digital payments more than doubled from 14&ndash;19% in March 2021 to 40&ndash;48% in March 2024, with UPI playing a key role. UPI transactions have grown at a stellar pace of 75% Compound Annual Growth Rate (CAGR), while UPI spends surged at 68% CAGR in the August 2019&ndash;August 2024 period, as the card industry&rsquo;s growth remained tepid. The immense popularity of UPI is seen from the transaction volume ratio which stands at 38.4 times of credit card transaction volumes, according to a recent report by Axis Securities. However, given the lower ticket size of UPI transactions, the UPI-to-Credit Card spends stood at 0.3 times in August, which is largely stable at current levels.

Consumer debt grew slightly in this period

HDFC, SBI, & ICICI issued 6L+ new cards as UPI continues dominating digital payments

Oct Credit Card Usage Crossed ₹2 Lakh Cr

HDFC, SBI, & ICICI issued 6L+ new cards as UPI continues dominating digital payments

November 28, 2024 | 11:35 IST