Credit Card Spending Touches All-time High Of Rs 1.37 Trillion In March

Credit card spending reached an all-time high of Rs 1.37 trillion in March 2023, driven by discretionary spending, according to the most recent Reserve Bank of India (RBI) data. 

Credit card usage has surpassed Rs 1 trillion for the 13th month in a row, demonstrating a surge in consumer spending since the conclusion of the Covid epidemic.

Credit card consumption would exceed Rs 14 trillion in 2022-23, up 47.27 per cent from Rs 9.71 trillion in FY22. 

In March, the banking industry added approximately 1.93 million credit cards, bringing the total number of outstanding credit cards to 85.3 million. In March, the net credit card additions were slightly higher than the 1.2-1.5 million cards added every month last fiscal year. 

In FY23, around a net of 11.67 million cards were added, a little increase over the 11.15 million additions in FY22.

According to recent data, e-commerce accounted for over 63 per cent of credit card expenditure, or little more than Rs 86,000 crore, with the remainder coming via point of sale (PoS) terminals. In March, consumer spending increased by 28 per cent year-on-year (YoY) and 15 per cent month-on-month (MoM).

The March total surpassed the previous high-water mark of Rs 1.29 trillion achieved in October 2022 during the festival season. 

Among the major players, Axis Bank increased its spending by 54 per cent in February, followed by ICICI Bank, which increased its spending by more than 20 per cent. During this time, HDFC Bank's spending climbed by 14 per cent, while SBI Card's spending increased by 11 per cent. 

Axis Bank (2.34 million) led the net addition in credit cards after absorbing Citibank's credit card portfolio. As of 31 March, Axis Bank's card base had grown to 12.1 million.

Among other significant issuers, ICICI Bank added 720,239 cards, bringing its total number of cards in circulation to 14.4 million. SBI Card added 256,463 cards, bringing its total base to 16.76 million.

HDFC Bank, the country's largest credit card issuer, added 236,770 cards in March, bringing its total card base to 17.53 million by the end of March 2023.

While expenditure has increased exponentially in the last year, the increase in net card additions has not kept pace with the increase in spending. This could be due to RBI guidelines requiring card issuers to deactivate credit cards that have been dormant for a year. This caused a massive correction in the sector, significantly reducing the outstanding base of credit cards.

In terms of market share, HDFC Bank has the largest share, both in terms of cards in force (CIF) and spending. As of March 2023, HDFC Bank had a spending market share of 27.41 per cent and a CIF market share of 20.55 per cent, followed by SBI Card, which had a spending and CIF market share of 17.93 per cent and 19.65 per cent, respectively. ICICI Bank comes in third place with a 17.45 per cent market share in spending and a 16.94 per cent market share in CIF, followed by Axis Bank with an 11.97 per cent market share in spending and a 14.21 per cent market share in CIF.