Credit card spending closed the fiscal year 2021-22 on a high of over ₹1 lakh crore in March and is expected to rise further with opening up of sectors like travel and hospitality.
Credit card transactions
According to data with the Reserve Bank of India, the value of transactions on credit cards in March 2022 was ₹1.07 lakh crore as against ₹86,304.76 crore in February. It was more than a 47 per cent jump on a year-on-year basis from ₹72,625.4 crore in March 2021.
“As per trends, April and May 2022 spending seems likely to further increase to ₹1.02 lakh crore and ₹1.1 lakh crore,” said a report by ICICI Securities, adding that a revival in air travel, the hospitality sector and increasing inflation outlook set a positive backdrop to credit card spend as well as receivables.
The overall credit card spend in 2021-22 of ₹ 9.72 lakh crore was a steep jump over the 2019-20 and 2020-21 levels of ₹7.3 lakh crore and ₹6.3 lakh crore, it added.
Motilal Oswal also noted that credit card spends grew 24 per cent on a month-on-month basis.
“Spending has continued with healthy momentum over Mar 2022, led by a rising share of e-commerce transactions that will keep the growth buoyant,” it said.
In March 2022, monthly spending per card for the industry increased 21 per cent month on month to ₹14,600 crore, much higher than the pre-Covid levels, it noted.
Ticket size, too, increased to ₹4,800 with the number of transactions per card up 16 per cent month-on-month to three transactions.
Significantly, the RBI data indicates that the value of credit cards for e-commerce transactions at ₹68,327.7 crore is much higher than PoS transactions worth ₹38,773.42 crore in March.
Most banks remain bullish about their credit card business, and issuances too have increased, the RBI data showed.
There were 7.36 crore credit cards outstanding by March end 2022, compared to 7.17 lakh by February end 2022.