India's credit card spends surge 6.6 pc in May, 1 million new cards added
New Delhi, June 26
Credit card spending in India surged to Rs 2,023 billion in the month of May, up 6.6 per cent year-on-year and 2.6 per cent month-on-month, a report said on Friday.
The sequential increase comes after a 10.1 per cent on-month decline in April, indicating that the recovery is not yet strong or structural, the report from Asit C. Mehta Investment Intermediates Limited said.
The industry added 1 million new cards during May, marking the second-highest monthly card issuance in the past 27 months. Total cards in force increased to 120.5 million, while YoY growth accelerated to 8.7 per cent, the highest recorded in the past 15 months.
Transaction volumes stood at 587 million, increasing 5.7 per cent sequentially and 25.8 per cent on an annual basis. The sequential recovery was largely attributable to the sharp decline witnessed in April.
Average spend per card eased 1.8 per cent YoY and increased by 1.7 per cent sequentially. SBI was the clear exception, with per-card spend up 12 per cent YoY, lifted by higher corporate spending.
Average spend per transaction declined on both measures, down 3 per cent MoM and 15 per cent YoY, continuing its downward trajectory due to increase in low value transactions.
The top four banks accounted for only 63.7 per cent of the incremental spending during the month despite holding an industry market share of roughly 76 per cent in spends, the report noted.
Among the top four banks, all broadly matched the industry's sequential growth except HDFC Bank, which grew by 4.2 per cent.
Another report has said that credit sourcing of new loans in Q3 FY26 grew 36 per cent YoY compared to 7 per cent a year earlier, driven by sustained demand from consumers and businesses.
The report highlighted strong growth in lending activity, led by accelerated sourcing growth, rising secured lending, and improving asset quality.
— IANS
Reader Comments
The 6.6% YoY increase is decent, but I'm more interested in the 25.8% rise in transaction volumes - that's real adoption happening! The recovery after April's dip shows resilience. However, with inflation still high, this might just be people stretching their finances rather than actual economic strength. Hope the RBI is monitoring this carefully.
Interesting that SBI is doing so well with corporate spend. Meanwhile, HDFC only grew 4.2% - maybe their market saturation is showing. The top four banks still dominate though, which isn't great for smaller banks trying to compete. Would love to see more fintech disruption in this space!
The recovery isn't "yet strong or structural" - that line is worrying. We're seeing spending go up but it might just be pent-up demand from April. Also, average spend per transaction is down 15% YoY because of more low-value transactions, which means people are using cards for chai and auto rides now. Good for digital India, but the overall economic picture is still mixed.
Yaar, 120.5 million cards in circulation now - that's almost 1 card per 10 people! But the real story is the FY26 Q3 loan sourcing growth of 36% YoY. Consumers and businesses are borrowing more aggressively. Hope this is sustainable growth and not creating a bubble. Remember 2008? 😬
The point about the top four banks only accounting for 63.7% of incremental spending despite holding 76% market share is
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