Credit card spending take 10% dip in Nov as festive season comes to end

Credit card spending by Indians dropped 10 per cent to Rs 1.61 trillion in November 2023 from a record Rs 1.78 trillion in October 2023 on account of a dip in e-commerce payments as the festive season came to an end.

While the Point of Sale (PoS) transactions increased to Rs 59,014.93 crore in November from Rs 57,774.35 crore in October, the e-commerce payments dropped to Rs 10,1628.71 crore from Rs 120,794.40 crore in October.

“The credit card transactions declined after the festive season neared its end which can be seen by the sequential drop in the online payments. However, the point of sale or PoS transactions have witnessed an increase,” said Saurabh Bhalerao, Associate Director, CareEdge.

Transactions of leading credit card issuers also saw a decline with industry leader HDFC Bank’s credit card transactions dropping down to Rs 42,049.32 crore from Rs 45,173.23 crore in October. ICICI Bank card transactions fell to Rs 27,772.63 crore from Rs 34,158 crore and Axis Bank to Rs 18,582.84 crore from Rs 21,728.93 crore. Transactions in SBI Cards, issued by the public sector lender, grew to 31,407.57 crore from Rs 35,406.01 crore in October 2023.

However, credit cards issued by domestic lenders continued to remain in the upward trajectory with issuances rising to 96 million in November from 94.71 million in October. HDFC Bank maintained its leadership position, having 19.51 million in circulation in comparison to 19.18 million cards in October. SBI Cards had 18.25 million in circulation as compared to 18.07 million, ICICI Bank was at 16.20 million, and Axis Bank stood at 13.34 million.

The credit card industry is likely to see loan growth moderating after the Reserve Bank of India (RBI) last week asked commercial banks and non-banking financial companies to increase the risk weight for unsecured lending.