Credit card spend jumps 48% to top Rs 1 trillion in March

Spending through the credit card in March 2022 jumped 48 per cent year-on-year to top Rs 1 trillion -- five months after it had hit the same figure for the first time in October 2021, buoyed by festive season expenditure.

The jump has been driven by the pickup in consumption as the pandemic recedes.

Expenditure in March, at Rs 1.07 trillion, was up 24.5 per cent over February, the data put out by the Reserve Bank of India (RBI) showed.

Further, more than 1.9 million credit cards (on a net basis) were added in March -- the highest for a month in FY22, taking the number to 73.6 million at the end of the financial year.

So, in a year, 11.6 million credit cards were added (on a net basis).

Month-on-month, credit card additions (on a net basis) increased by 31.7 per cent.

“March is historically a strong month. However, spends traction should continue,” said an analyst tracking the numbers.

“We are seeing consumption coming up as Covid-19 recedes,” Anup Bagchi, executive director, ICICI Bank, had said in an earnings call last month.

HDFC Bank, the largest credit card issuer in the country, saw its market share in this segment rise to 26.6 per cent in March from 25.7 per cent in February, while for ICICI Bank it dropped marginally to 19.4 per cent.

On the other hand, SBI Cards increased its market share to 19.1 per cent.

“Both HDFC Bank and SBI Cards have seen a sharp pick up in spends market share.

"Since spends usually come with a lag of around 6-9 months, the revocation of ban for HDFC Bank in August 2021 has finally resulted in them seeing a pickup in spends market share over the last couple of quarters which is encouraging,” said Macquarie Research in a report.

As far as net credit card addition is concerned, Axis Bank, the fourth-largest player in the space, added the highest number at 433,966 among the top issuers, followed by HDFC Bank with 263,864, SBI Cards with 245,133, and ICICI Bank with 205,360.

Net addition picked up pace after the RBI in late August last year lifted the prohibition on HDFC Bank regarding issuing new credit cards. It added (on a net basis) almost 1.8 million cards in the period between September 2021 and March 2022.

In the same period, SBI Cards added 1.36 million, ICICI Bank 1.52 million, and Axis Bank 1.72 million.

“There has been a sharp jump in card additions by players outside the top 8 which has seen a four-fold increase in additions since Sep-2021 and a sharp Rs 100bps improvement in market share (both in spends and card additions).

"A closer look reveals that BOB Cards, IDFC First Bank, IndusInd Bank and Federal Bank have contributed to the increase in card additions,” the report added.