India’s credit card market is booming, with over 8.6 crore credit cards in circulation as of April 2023, marking a 15 per cent increase from the previous year's 7.5 crore cards. The average monthly spending per card rose by 9.37 per cent, says BankBazaar in a report.
On an average, a customer spent Rs. 5,120 per transaction in April 2023, while they spent Rs. 15,388 per card in the entire month. In April 2022, the average transaction value was Rs. 4,731 and the average spend per card was Rs. 14,070.
The milestone of 100 million cards is expected to be achieved in or after 2023, says the report. Alongside the rising number of credit cards, the outstanding debt on these cards has surged by a staggering 30 per cent from Rs 1.54 lakh crore to Rs 2 lakh crore.
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“Credit-confident Indians are flipping out their credit cards for big-ticket purchases, encouraged by reward points, cashback, no-cost EMIs, and premium lifestyle rewards. This reflects in the steady growth of the average transactions. The industry average monthly spend per card was Rs. 15,388,” the report said.
UPI Replaces Debit Cards
Despite the credit card's dominance in larger expenditures like travel, electronics, dining, and shopping, UPI gained significant ground in smaller transactions such as grocery spends.
In April 2023, UPI facilitated over Rs. 14 lakh crore across 886 crore transactions, averaging around Rs. 1,600 per transaction. Last year, UPI recorded Rs. 9.8 lakh crore across 558 crore transactions. Consequently, debit card transactions declined by 16 per cent in transaction value and by 30 per cent in the number of transactions (23 crore).
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Who Are Top Players In Credit Card Market?
Among credit card issuers, HDFC Bank, SBI, ICICI Bank, and Axis Bank hold a dominant market share, accounting for 71 per cent of all credit cards.
Catholic Syrian Bank Limited, South Indian Bank, and Federal Bank stand out as the most frequently used credit cards on average with around four spends per card per month. On the other hand, Karur Vysya, IndusInd, and CitiBank demonstrate the highest monthly spending per card, exceeding Rs. 27,000.
While some government banks, such as Bank of Baroda, have saw a growth rate of 63 per cent, others like Bank of India, Bank of Maharashtra, and Canara Bank have cut back on their credit card offerings.
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