Credit card spends touch all-time high
1 min read 28 Jun 2022, 12:23 AM ISTThe total number of outstanding credit cards in the system grew 23.2% year on year to 76.9m in May 2022
PremiumMUMBAI : Credit card spends touched an all-time high of ₹1.14 trillion in May, a sign that the retail economy is growing strong.
Credit card spends grew 118% year-on-year and 8% month-on-month on the back of strong e-commerce spending and high-value spending on travel and tourism and discretionary purchases, according to Reserve Bank of India data.
Credit card spends remained well above the ₹1 trillion in May despite inflationary pressures and rising interest rates. Total credit card spending in May was ₹1.13 trillion against ₹1.05 trillion spending in April and ₹52,200 crore in May last year.
Indusind Bank and Kotak Mahindra Bank saw the highest incremental growth in terms of credit card spends at 17% and 15%, respectively, while all other players grew in the 4-9% range. American Express, on the other hand, saw a decline of 2% month-on-month.
“Latest data releases from RBI reveal that credit card spends have been very strong touching an all-time high level in May 2022," said Macquarie Research in a note. Bounce rates by value are also at a three-year low levels. “These data points indicate that the retail economy is strong," it said but cautioned that with interest rates expected to rise rapidly in the next few quarters we need to see whether current trends are sustainable.
The total number of outstanding credit cards in the system grew 23.2% year-on-year to 76.9m in May 2022, the highest in the past 27 months.
In terms of new card additions, HDFC bank saw the highest incremental card additions with 38,000 new cards being added in the same month. The bank has also been seeing an increase in marketshare in credit card spends since April.
The bank’s marketshare in credit card spends stood at 27.7% in May compared to 27.6% in April and 26.6% in March.
This gain in marketshare comes after HDFC Bank launched 1 million new credit cards and relaunched three credit cards after RBI lifted the ban on new credit card issuances in August last year.
Axis Bank on the other hand saw a fall in marketshare in spends despite adding large number of cards in May.
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