Credits cards in use just short of 100 million

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The usage of credit cards in India is experiencing a notable surge, reaching a milestone of 100 million cards in circulation. According to the latest data from the Reserve Bank of India (RBI), as of December 2023, there were 97.9 million outstanding credit cards, with an addition of 1.9 million cards in that month alone.

In the calendar year 2023, the country witnessed the inclusion of 16.71 million new credit cards, marking a significant upswing from the 12.24 million added in 2022. This consistent growth trend has been observed over the past five years, leading to a  77 percent increase in the number of credit cards from 55.53 million in December 2019, a report in Business Standard says.

The driving force behind this uptick can be attributed to a combination of sustained efforts by banks and evolving consumer spending patterns. Saurabh Bhalerao, Associate Director at CareEdge, noted, “The aggressive promotion of credit cards by banks and shifts in consumer spending habits have fueled the surge in credit card circulation. Credit cards are now allocated based on individual eligibility, a departure from the past when obtaining them was not as straightforward. While banks initially introduced various credit card types, there has been a recent reduction in their offerings.”

Bhalerao further explained that the changes in consumer spending patterns and the growing demand for credit cards are influenced by incentives such as “zero-cost EMI” offers.

Among private sector players, HDFC Bank continued to lead with 19.81 million credit cards in circulation as of December 2023, up from 19.51 million in November. HDFC Bank recently announced surpassing the 20 million mark in January of the same year. Other major players include ICICI Bank with 16.48 million, SBI Card with 18.48 million, and Axis Bank with 13.58 million credit cards.

The total credit card spending by Indians witnessed a notable increase to approximately Rs 1.65 lakh crore in December 2023, compared to around Rs 1.61 lakh crore in November. This uptick reflects a mixed trend in point-of-sale (PoS) and e-commerce payments. While PoS transactions slightly decreased to around Rs 58,300.18 crore from around Rs 59,014.93 crore in November, e-commerce payments rose to approximately Rs 1.06 lakh crore  from around Rs 1.02 lakh crore.

Leading credit card issuers also reported increased transaction volumes. HDFC Bank’s credit card transactions rose to approximately Rs 44,771.87 crore in December, up from around Rs 42,049.32 crore in November. Similarly, ICICI Bank’s card transactions increased to approximately Rs 28,213.32 crore from around Rs 27,772.63 crore, and Axis Bank recorded a rise in transactions to around Rs 19,055.30 crore from around Rs 18,582.84 crore. However, transactions on SBI Card, issued by the public sector lender, decreased to around Rs 29,249.29 crore from around Rs 31,407.57 crore in November 2023.

Overall, credit card transactions in December 2023 reported a robust 32 percent year-on-year increase from around 1.25 lakh crore in December 2022, indicating a substantial expansion in this financial domain.