Online transactions push credit card spend to new highs

Credit cards have many advantages and disadvantages with the ease of payment topping the list of advantages. But credit cards need to be used in a proper and sensible way. People use credit card for all tasks, be it daily essentials or electronic appliances or even for booking flights and hotels. and end up getting a big bill.  Some people spend lavishly via cards. In recent times, this expenditure has been increasing sharply. The latest figures from the RBI also confirm this.

Just look at the figure from the RBI for April.  The spending through credit cards in April 2024 increased by 18 percent. This is on an annual basis. In April, a total of Rs 1.57 lakh crore was spent using credit cards. However, there was a slight reduction in this figure compared to March. Expenditure in March was Rs 1.65 lakh crore.

Another important figure to note is that in April, the average spend per card was Rs 15,307. However, compared to April 2023, there has been a 0.5 percent reduction in average expenditure. These figures indicate that there has been a marginal difference in average expenditure.

Now,  we understand the reason for increase in credit card spending on an annual basis. So, the largest contribution to credit card spending in April this year was from online transactions. In April, more than Rs 94,000 crore was spent on e-commerce websites using credit cards. This figure has increased by 16.5 percent annually. Meanwhile, transactions worth nearly Rs 62,000 crore were made at Point of Sale terminals. There has been a 20 percent increase annually in this figure. Similarly, cash withdrawals of Rs 458 crore were made using credit cards at ATMs.

Now let’s look at the standings of credit card companies or banks in the business.

By the end of April, the number of credit cards in the country was more than 10.25 crore. In March, this number was 10.18 crore. This means that the number of cards has increased. HDFC Bank still remains the largest company or bank in terms of both the number of cards and spending. The bank’s card count was more than 2.08 crore. Meanwhile, spending amounted to Rs 41,036 crore. SBI Card is the second-largest card company in the country, with its card count reaching 1.90 crore by the end of April 2024. In terms of spending, ICICI Bank remained in second place. Transactions worth a total of Rs 29,441 crore were made using ICICI Bank’s credit cards.