Credit Card Spending in India Crosses Rs 2 Lakh Crore in October, Driven by Festive Surge
In October 2024, India’s credit card spending reached an all-time high of Rs 2.02 lakh crore, marking a significant 14.5% growth from the previous month, according to data released by the Reserve Bank of India (RBI). This represents a 13% year-on-year increase, underscoring the robust consumer demand during the festive season.
The increase in credit card transactions is attributed to a combination of factors, including the lower base from the previous year and heightened consumer activity during the festival season, which saw a surge in promotional offers, particularly equated monthly instalments (EMIs).
As per the RBI’s report, the total number of credit cards in circulation grew by nearly 13% to reach 106.88 million, with a slight month-on-month increase of 0.74%. Leading the charge in issuing new credit cards were HDFC Bank with 241,119 cards, followed by SBI Cards with 220,265 cards, and ICICI Bank with 138,541 cards.
While credit card transactions surged, debit card usage saw a decline, with transactions falling by almost 8% from Rs 43,350 crore in August to Rs 39,920 crore in September. This shift highlights the growing preference for credit card payments, particularly with the rise of UPI-based digital transactions.
Unified Payments Interface (UPI), which has seen exponential growth, continues to dominate the digital payment landscape. The share of digital payments, including UPI, has risen dramatically, more than doubling from 14-19% in March 2021 to 40-48% in March 2024. UPI transactions alone have grown at a staggering 75% compound annual growth rate (CAGR), surpassing the card industry’s growth.
Despite the dominance of UPI, credit card spending remains a significant part of the Indian payments ecosystem, with UPI-to-credit card spending ratio stable at 0.3 times, due to the typically smaller ticket size of UPI transactions.
With the continued growth in both credit card and UPI transactions, the Indian payments industry is poised for further expansion in the coming months, driven by technological innovations and an increasing preference for digital payments.
