Credit Card Spending Hits Record High at Rs 1.4 Lakh Crore in May
- ByStartupStory | July 17, 2023
In a record-shattering achievement, credit card spending in May reached a peak of Rs 1.4 lakh crore, up from the typical fiscal 2023 spend of Rs 1.1-1.2 lakh crore. The average spend per card also hit a record high of Rs 16,144.
According to recent data from the Reserve Bank of India (RBI), credit card spending and outstanding dues have been progressively increasing, marking a 5% monthly growth rate this year. This growth follows a period of relative stability in the previous fiscal year.
The quantity of active credit cards has similarly seen a substantial rise, reaching a record 87.4 million in May. Since the start of the year, an additional five million cards have been issued, two million of which were activated in the first two months of this fiscal year alone.
RBI data further discloses that the number of active cards has steadily increased from 82.4 million in January 2023 to 86.5 million in April 2023.
HDFC Bank holds the dominant market share, with 18.12 million cards in circulation, and also leads in outstanding dues, which make up 28.5% of the industry-wide dues. SBI Card and ICICI Bank follow with 17.13 million and 14.67 million cards respectively. Axis Bank, with 12.46 million cards, is the fourth-largest player, having benefited from its recent acquisition of Citi’s retail portfolio.
In a recent report by Transunion Cibil, it was observed that the delinquency rate for bank credit card portfolios has been on the rise, increasing by 66 basis points to 2.94% in March 2023. This trend suggests increasing financial stress among individuals. The report also emphasized that credit cards and personal loans are the fastest-growing products, raising questions about the potential risk of unsecured loan portfolios.
The report specified that credit card balances overdue for more than 90 days constituted 2.94%, marking a 0.66% increase from the previous year. Conversely, overdue personal loan balances showed slight improvement, standing at 0.94%, a 0.04% decrease compared to the previous year. In terms of loan growth, the year leading up to March 2023 saw a 34% increase in outstanding credit card balances and a 29% growth in personal loans.
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