Indians spent 25% more using credit cards in September 2024, compared to September 2023, according to a Business Standard report which added that this was the highest increase in six months and was due to a healthy festival demand this year as well as a favourable base effect.
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September 2024 spending reached ₹1.76 lakh crore, compared to ₹1.42 lakh crore during the same month of the previous year according to the report which cited Reserve Bank of India (RBI) data.
The previous month of August meanwhile saw ₹1.68 lakh crore in credit card spending.
“The growth in credit card spending is driven by a lower base in the previous year and the festival season,” the report quoted Saurabh Bhalerao, head of BFSI research at CareEdge Ratings as saying. “There has been an increase in promotional schemes like equated monthly instalments during the festival period. ”
The base effect here refers to the impact of the previous year’s credit spending level rise on the current year’s spending level rise.
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He further went on to say that “October is also likely to see a rise in spending due to the festival season and associated promotional activities,” according to the report.
This comes after RBI Governor Shaktikanta Das said festival season demand at the moment is showing mixed signals with positives generally outweighing the negatives.
What are some other details on India’s credit card spending?
The total number of credit cards in itself also rose 14% to 106.11 million in September 2024, compared to 93 million in September 2023.
HDFC Bank which happens to be India’s largest credit card issuer had 22.4 million cards in circulation. This was followed by SBI’s 19.5 million, ICICI’s 17.56 million, and Axis Bank’s 14.79 million.
HDFC alone saw a 35% increase in consumer credit spending compared to September 2023, SBI saw 11%, ICICI saw 24%, and Axis Ban saw 15.1%.
However, Axis Bank has limited the number of new cards issued citing early signs of stress and indebtedness, according to the report.