Credit Card Spending Hits Record High At Rs 1.4 Lakh Cr; 87.4 Mn Cards In Use

Credit card spending in May reached a record high of Rs 1.4 lakh crore, according to the latest data from RBI. Throughout this year, the total spending and outstanding dues on credit cards have been increasing by five per cent on a monthly basis, after remaining relatively stable during the previous fiscal year. 

Furthermore, the number of credit cards in use has also experienced a significant increase, surpassing 87.4 million in May, an all-time high. Since January, there has been an additional five million cards in circulation, with two million being utilised within the first two months of the current fiscal year. 

The RBI data reveals that the number of active cards in January 2023 was 82.4 million, which gradually rose to 83.3 million in February, 85.3 million in March, and 86.5 million in April. 

While credit card spends were between Rs 1.1-1.2 lakh crore throughout the fiscal year 2023, they reached a new peak of Rs 1.4 lakh crore in May. Additionally, the average spend per card reached a record high of Rs 16,144. 

HDFC Bank holds the largest market share with 18.12 million cards in circulation and also leads in terms of outstanding dues, accounting for 28.5 per cent of the total industry-wide dues. SBI Card follows closely with 17.13 million cards, while ICICI Bank has 14.67 million cards. Axis Bank ranks fourth with 12.46 million cards, and its recent acquisition of Citi's retail portfolio has helped it narrow the gap with ICICI Bank. When Citi sold its portfolio along with its retail banking business to Axis in 2022, it had 162,150 active card users. 

In a Transunion Cibil report, it was noted that delinquencies in the credit card portfolio of banks have been increasing, rising by 66 basis points to 2.94 per cent in March 2023. This indicates a growing level of stress among individuals. The report also highlighted that credit cards and personal loans were the fastest-growing products, raising concerns about riskier unsecured loan portfolios, as stated by the regulator. 

Regarding asset quality, the report stated that credit card balances unpaid for more than 90 days accounted for 2.94 per cent, reflecting a 0.66 per cent increase compared to the previous year. On the other hand, the figures for personal loans improved slightly, with balances unpaid for over 90 days standing at 0.94 per cent, a 0.04 per cent decrease compared to the previous year. From a loan growth perspective, outstanding balances on credit cards grew by 34 per cent in the year leading up to March 2023, while personal loans saw a growth of 29 per cent.