Credit Card Spends Hit All-Time High Of Rs 1.1 Lakh Crore
Credit card spending has reached a new high, indicating an improvement in economic activity, while bounce rates remain high while bounce rates have dropped to a three-year low.
May had the fastest increase in credit card purchases and additions in previous quarters, highlighting the waning influence of Covid-related interruptions on purchasing patterns.
According to information made public by the Reserve Bank of India (RBI), credit card expenditure in May totalled Rs 1,14,000 crore, a rise of 8% month over month (MoM) and 118% over May 2021.
Despite pressures from inflation and rising interest rates, credit card spending in May remained significantly higher than Rs 1 trillion. The total amount spent on credit cards in May was Rs. 1.13 trillion, up from Rs. 1.05 trillion in April and Rs. 52,200 crore in May of the previous year.
The biggest incremental rise in credit card spending was recorded by Indusind Bank and Kotak Mahindra Bank, at 17% and 15%, respectively. All other companies experienced growth in the 4-9% range. American Express, on the other hand, experienced a 2% month-over-month fall.
According to an analysis of data by Motilal Oswal, "The Banking system reported net additions of ~1.7m Credit Cards in May'22, led by healthy traction in HDFC Bank, Axis Bank, and ICICI Bank. This has taken the total Credit Card base to 76.9m (+23.2% YoY - the highest in the past 27 months). Among major players, Kotak Mahindra Bank reported a strong YoY growth (+55.8%), followed by AXSB (+32.9%), IIB (+26.3%), and RBK (+26.2%). HDFC Bank was the largest acquirer, acquiring ~385k new cards, while Axis Bank/ICICI Bank/SBI Card/Kotak Mahindra Bank added ~215k/~212k/~202k/ ~181k cards. Conversely, American Express IN and Standard Chartered saw a decline of ~9k cards each to their card base. "