Credit Card Outstanding Reaches All-Time High In January

The credit card outstanding in January rose 29.6 per cent to reach an all-time high of Rs 1.87 lakh crore on back of increased digitisation and rising consumer confidence in the post-Covid period..As per the latest data of the Reserve Bank, the credit card outstanding has recorded a growth of over 20 per cent in the 10 months of the current fiscal..June had recorded the highest growth of 30.7 per cent.."Many categories have been digitised which has resulted in increased spends from existing customers using their credit cards," said Rama Mohan Rao Amara, MD & CEO, SBI Card..The ease of payments has definitely contributed to this increase in spending in categories, including health and fitness, education, utility bills, among others, he added..On the monthly trends in credit card usage, Rama Mohan Rao Amara said there has been a consistent growth in the credit card spends for the last few months..In January this year, he said card spends stood at Rs 1.28 lakh crore as compared to Rs 1.26 lakh crore in December 2022.."If one looks at year-on-year growth then there is a 45 per cent increase. In fact, since the last 11 months credit card spends have consistently stayed above Rs 1-lakh-crore mark," he added..At the end-January 2023, there were nearly 8.25 crore credit cards issued by different banks..HDFC Bank, SBI Card, ICICI Bank, Axis Bank and Kotak Bank are the top five credit issuers in the country..V Swaminathan, Executive Chairman, Andromeda loans, said while secured loans like mortgage loans and business loans have taken a backseat these days, the personal loan segment is growing.."Fresh graduates, who are just entering the workforce, are more financially aware than their predecessors and are actively trying to build their credit scores. With more fintech companies building a presence online and sharing information, youngsters are making more informed credit card purchases," he said..The Reserve Bank data further revealed that the annual growth in credit card outstanding in January 2023 was 29.6 per cent, as against about 10 per cent in the year-ago month. Since then the outstanding amount has increased from Rs 1,41,254 crore in January 2022 to Rs 1,86,783 crore in January this year..As per a recent RBI survey, the consumer confidence has improved further both for the current period as well as for the year-ahead..The current situation index continued on its recovery path for the ninth survey round since the historic low recorded in mid-2021 and increased by 1.3 points in January 2023 on the back of improved sentiments on general economic situation and household income, said the survey released on February 8, the day the bi-monthly monetary policy was unveiled..Rao further noted that during December 2022, e-commerce spends contributed about 60 per cent in total credit card spends.."So, overall, we have been seeing normalisation in spends which is comparable and in fact even better than pre-COVID levels. And with the upcoming Holi and summer holiday season, we may see the momentum continuing in the coming months too, depending on the operating environment," said the SBI Card's top official..Swaminathan further said that during the pandemic, credit cards were primarily used to purchase groceries and pay utility bills. Discretionary spending on fuel, travel, and entertainment dipped extensively.."In 2023, with the economy returning back to its pre-pandemic state, people are using credit cards to travel, spend on fuel, renovate their houses, purchase appliances, and the like. Travel and entertainment are two of the broadest categories that picked up momentum after the pandemic," he said..At end-January 2023, there were nearly 8.25 crore credit cards issued by different banks..HDFC Bank, SBI Card, ICICI Bank, Axis Bank and Kotak Bank are the top five credit issuers in the country..(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Credit Card Outstanding Reaches All-Time High In January

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP