Credit card spends drop over 10% from festival spending-led peak in October

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After surging to a record high in October on the back of festival season-led accelerated discretionary spending, credit card spends normalised in November, falling over 10 per cent month-on-month.

Spends for the month stood at ₹1.61-lakh crore, 10.04 per cent lower m-o-m. In October, they had surged over 25 per cent to touch the record of ₹1.78-lakh crore, according to data by the Reserve Bank of India (RBI).

Most major issuers registered a double digit decline in spends during the month with spends for the top four issuers falling 7-19 per cent. ICICI Bank saw the highest decrease at 18.7 per cent followed by Axis Bank at 14.5 per cent.

The share of e-commerce payments in credit cards spends fell to 63.3 per cent in November after steadily increasing for the past three months to 67.6 per cent as of October 2023. On the other hand, the share of PoS (point-of-sale) transactions jumped to 36.7 per cent in November after falling for the last three months to 32.4 per cent in October.

Other major issuers such as Kotak Mahindra Bank, AU Small Finance Bank, DBS Bank India and Federal Bank too saw a decline in spends, whereas IndusInd Bank and IDFC First Bank saw an increase of 1.8-2.0 per cent m-o-m.

Cards outstanding

Even as spends declined during the month, credit cards-in-force continued to grow at a steady pace. Outstanding cards touched a new high of 9.60 crore cards in November, up 1.4 per cent from the previous high of 9.47 crore cards in October.

The number of credit cards rose by 12.9 lakh during the month, lower than 16.9 lakh cards in October and 17.4 lakh in September, largely due to a decline in the number of cards for banks such as Bank of Baroda, Karur Vysya Bank, and SBM Bank India.

Among the top four issuers, HDFC Bank was the leader in terms of increase in number of cards, breaking ICICI Bank’s three-month streak. HDFC Bank net added 3.2 lakh cards during the month to a total of 1.95 crore cards, maintaining its position as the largest card issuer in the country.

SBI Card, ICICI Bank and Axis Bank all saw net additions of less than 2 lakh cards during the month. IDFC First Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank and AU Small Finance were the other issuers to see strong net addition in cards.