Credit Card Circulation Hits 103.3 Million in May 2024, Spending Surges 17% YoY

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Credit Card Circulation and Spending Surge in May 2024, Led by HDFC Bank

Team Finance Saathi

27/Jun/2024

Key Points:

Total credit card circulation increased by 18% YoY to 103.3 million in May 2024.
Credit card spending surged by 17% YoY, reaching Rs. 1.65 trillion in May 2024.
HDFC Bank leads the market in the number of credit cards in force, followed by SBI Cards, ICICI Bank, and Axis Bank.

The rise in the number of credit cards can be attributed to several factors. Firstly, the expansion of financial services into rural and semi-urban areas has played a crucial role. Banks and financial institutions have been actively working to bring more people into the formal banking system, offering attractive credit card products that cater to various segments of the population.

Secondly, the advent of technology and the increasing penetration of smartphones have made it easier for people to apply for and manage credit cards. The convenience of digital applications and instant approvals has significantly reduced the barriers to acquiring a credit card.

Increase in Credit Card Spending

Not only has the number of credit cards increased, but spending through credit cards has also witnessed a substantial surge. In May 2024, credit card spending reached Rs. 1.65 trillion (US$ 19.76 billion), representing a 17% year-on-year growth. This rise in spending is reflective of the overall growth in consumer confidence and the economy.

When compared to the previous month, credit card spending in May saw a 6.45% increase from Rs. 1.55 trillion (US$ 18.56 billion) in April 2024. This month-on-month growth indicates a positive trend in consumer spending habits, likely driven by various factors such as seasonal purchases, travel, and an increase in online shopping.

Market Leaders in Credit Cards

HDFC Bank continues to dominate the credit card market, maintaining its position as the leader in the number of cards in force. The bank's success can be attributed to its extensive product range, superior customer service, and a strong brand reputation. HDFC Bank has consistently innovated in the credit card space, offering various rewards, cashback programs, and benefits that attract a wide range of customers.

Following HDFC Bank, SBI Cards holds a significant market share, leveraging its extensive customer base and strong distribution network. ICICI Bank and Axis Bank also feature prominently in the list of market leaders, each bringing unique strengths and offerings to the table.

Factors Driving Growth

Several factors are driving the growth in credit card circulation and spending:

Economic Recovery: As the economy recovers post-pandemic, consumer spending has picked up, leading to higher credit card usage.
Digital Payments: The government's push for digital payments and the increasing adoption of e-commerce have contributed significantly to the rise in credit card transactions.
Innovative Products: Banks are continuously innovating their credit card offerings, providing customers with more reasons to use credit cards for their purchases.
Increased Credit Limits: With improving economic conditions, banks have been more willing to increase credit limits, allowing consumers to spend more.

Also Read : Office Space Leasing Rises 8% in Major Indian Cities in Q2 2024

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Credit Card Circulation and Spending Surge in May 2024, Led by HDFC Bank

Increase in Credit Card Spending

Market Leaders in Credit Cards

Factors Driving Growth

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