Festivals, GST cuts to drive credit card spends after 13.7% August rise

While spends saw a robust increase on a YoY basis, there was a slight moderation compared to previous month, where spends had touched Rs 1.93 trillion

Credit card spends increased by 13.7 per cent year-on-year (Y-o-Y) in August this year to ₹1.91 trillion, and industry experts believe the festival season and goods and services tax (GST) rate cuts will lift credit card spends further in the months to come.

 

While spends saw a robust increase on a Y-o-Y basis, there was a slight moderation compared to the previous month, when spends had touched ₹1.93 trillion.

 

In August 2024, credit card spends were ₹1.68 trillion.

 

Among the major card issuers, HDFC Bank’s spends increased by 24.01 per cent Y-o-Y to ₹53,873.05 crore in August, while SBI Card saw a 24.8 per cent Y-o-Y increase in spends to ₹33,063 crore.

 

 

ICICI Bank posted a 6 per cent Y-o-Y increase in spends to ₹34,492 crore, and Axis Bank recorded an 11.08 per cent Y-o-Y rise to ₹21,761 crore.

 

Earlier this month, the government announced reforms in GST with rate reductions across essential items, which are likely to boost consumption in the country, experts said.

 

This move is expected to result in increased credit card spending in the upcoming months, as the rate rationalisation coincides with the festival season, they added. 

 

Ashutosh Mishra, head of institutional equity research at Ashika Stock Broking, said, “The GST cuts, which lower prices on essentials and aspirational goods alike, coincide with the festival season — historically the strongest period for consumer spending. This is expected to significantly lift credit card usage. While issuances had plateaued due to Unified Payments Interface’s popularity and the Reserve Bank of India’s caution, lenders are now gearing up with aggressive offers, equated monthly instalment schemes, and co-branded cards.”

 

Mishra added, “The anticipated reduction in delinquencies provides issuers more confidence, likely driving growth in issuances. Financial technology companies and e-commerce platforms are set to push co-branded products aggressively, where growth could outpace traditional cards by nearly 20 per cent. Overall, both spending and issuances are poised to rise meaningfully in the coming months.”

 

Data shows outstanding credit cards as of August stood at 112.34 million.

 

Among the leading credit card issuers, HDFC Bank’s credit card outstanding stood at 25.02 million, SBI Card’s at 21.33 million, ICICI Bank’s at 18.18 million, and Axis Bank’s at 15.32 million.