Credit card dues up 30% in Apr; cross Rs 2 trillion mark for the first time

The Reserve Bank of India (RBI) has expressed its concern about the growing unsecured bank credit

Credit card dues have grown by 30 per cent in the last year, which is double the pace of growth of overall bank loans, The Times of India (ToI) has reported. This has resulted in a situation where the credit card due payments have crossed the Rs 2 trillion mark for the month of April.

However, the report said lenders do not see this as something to be worried about as they see the share of credit card dues as small. Notably, the Reserve Bank of India has expressed its concern about growing unsecured bank credit.

Citing RBI data, the newspaper said that credit card balances crossed Rs 2 trillion in April 2023, 29.7 per cent up compared with April 2022.

Reasons behind the rising credit card debt

Rising credit card debt doesn't necessarily mean a rise in indebtedness. Industry experts believe that increased credit card usage and inflation have played an active role in this. Talking about the rising debt, the President and head of the cards & payments business at Axis Bank, Sanjeev Moghe, told ToI that consumer spending has increased over the last year.

The report added that the total value of products and services purchased using credit cards stood at Rs 1.3 trillion in April 2023.

Credit card users

Elaborating on the customers using credit cards, bankers said that they look into people's credit history and issue credit cards only after conducting a thorough check on their financial health.

While there has been a rise in credit card users in the country, overall penetration still remains among the lowest in the world. An industry expert cited in the report said that less than 5 per cent of people in the country have a credit card which is lower than in many developing economies.