Credit card usage dips in September
credit cards fell 4.2% in September to ₹1.42 trillion from ₹1.48 trillion in August, the latest data released by the Reserve Bank of India showed. Credit card spending declined for all major issuers, except IndusInd Bank, which reported a 10.9% growth. State Bank of India, Axis Bank, ICICI Bank, and HDFC Bank reported month-on-month declines of 8.9%, 8.4%, 4.9%, and 1.8%, respectively.
Within credit card spending, transactions at the point of sale, or PoS, terminals fell by 7% from August to ₹49,440 crore in September. On e-commerce websites, credit card spending fell by 3% to ₹92,879 crore in September. Experts said the drop in credit card spending in September could be because consumers could have held on to their wallets as Diwali falls in November.
“Last year Diwali was in October, and the festive campaigns started from September after RBI set card on file (COF) transaction implementation date on 30 September," said Mohit Bedi, co-founder of fintech Kiwi, adding that there could be record high card spending on e-commerce platforms in October and at PoS terminals in November. “This year, since Diwali falls in November, all the major festive sales started in October," Bedi said. The other reason, experts said, could be that corporate spending fell in September while retail card spending remained the same, resulting in a fall in overall credit card transaction value.
That said, new credit card additions rose by 1.9% m-o-m to 1.74 million during September. Card addition was led by ICICI Bank, which added about 349,000 credit cards, followed by HDFC Bank, which added 299,000, Axis Bank at 186,000, and SBI at 95,000. With post-covid pent-up demand benefits largely behind, most card issuers are looking forward to the
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