After a streak of declines in November, credit card spending picked up again in December, spurred by a declining festive season effect and a high base, to record Rs 1 trillion for the 10th month in a row.
According to the latest figures released by the Reserve Bank of India (RBI), credit card spending in December 2022 reached Rs 1.26 trillion, an increase of 10.21% compared to November. And on a YoY basis, spending increased by 34.31% during this period.
HDFC Bank’s spending increased by 9.32% MoM, while ICICI Bank’s spending increased by almost 13%. Similarly, SBI Card and Axis Bank increased their spending by 13% and 8.8% respectively over the period.
Spending has consistently surpassed Rs 1 trillion, fueled by an increase in e-commerce transactions.
Additionally, travel and entertainment spending has come back strong after a show of calm during Covid. This recovery is helping credit card spending grow.
In fact, credit card spending hit an all-time high of Rs 1.29 trillion in October 2022 due to holiday spending.
Meanwhile, net card additions declined significantly in December, with just 580,555 cards added by the banking system. This increased the number of outstanding credit cards in the system to 81.18 million.
On average, the industry is net adding more than 1.5 million credit cards per month. This is because companies have been aggressive in the unsecured lending business since the pandemic. Progress excludes two months in which the industry witnessed a net decline in credit cards as the RBI’s norm kicked off. The norm required card issuers to deactivate credit cards that had been inactive for one year.
The banking industry added about 1.3 million cards in November and 1.66 million in October.