ET lenders spoke with suggested they’ve had a bumper holiday season, crossing pre-Covid numbers.
âThere has been continued growth in credit card spending since the phased unlock, leading to another peak seen in October,â said Sanjeev Moghe, Head of Cards and Payments, Axis Bank. âOn a month-to-month basis, expenses have increased by 50% and over 75% on an annual basis. This is a new peak, with numbers surpassing pre-Covid levels, mainly thanks to large-scale festive offerings covering a wide range of categories such as lifestyle, durable goods, travel and meals. ”
Data from the Reserve Bank of India (RBI) showed that overall credit card outstanding remained stable at 1.1 lakh crore. Credit card spending in September exceeded 80,000 crore, surpassing the monthly peak in March spending of 72,300 crore.
âCredit card spending rose 34% sequentially (in September) and the October and November first week trends remain very strong,â said Ansuman Deb of ICICI Securities. The spending pull is evident from the record absolute spending and the credit card to debit card spend ratio, which stands at 1.28x. October is expected to be 15-18% better than September while the execution rate for the first week of November was better than October. ”
RBI estimates showed the banking system reported net additions of nearly 1.1 million credit cards in September, more than double the July additions, bringing total credit card outstanding to 65. millions. HDFC Bank was the largest acquirer with 244,000 additions, closely followed by ICICI Bank with 234,000 lakh of new cards. Axis Bank added over 200,000 cards, while SBI Cards added 175,000 new credit cards.
Kotak Mahindra Bank recorded the strongest growth in credit card spending at 27% in September compared to July, followed by ICICI Bank and IndusInd Bank at 13% each.
âWe are seeing an increase in spending on credit cards, mainly related to shopping and travel during the holiday season, and we hope to see this momentum continue over the next two months,â said Ambuj Chandna, President-Consumer by Kotak Mahindra Bank.