Credit Card Spending Growth Normalises Amid Rising Balances — CareEdge Analysis

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CareEdge Report

The credit card segment has experienced significant growth over the years, driven by rising digital transactions, economic expansion, and increasing demand for consumer credit. While spending surged post-pandemic, the recent slowdown in total card spending and circulation reflects the impact of monetary tightening, elevated interest rates, and stricter lending policies.

Despite this, outstanding balances have continued to rise, indicating an increase in consumer borrowing. Private banks have maintained a dominant position in the market, outpacing public sector banks in both card issuance and spending while also exhibiting stronger asset quality.

In contrast, PSBs continue to face higher delinquency rates. While online transactions continue to dominate, offline spending has shown resilience with steady growth.

Overall, while credit cards remain a key component of retail lending, the rising delinquencies and slowing growth trends highlight the need for prudent credit expansion and effective risk mitigation strategies to ensure sustainable growth in the sector.

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