The use of credit cards has surpassed the pre-Covid-19 level and reached a four-year high at the end of Q2FY23.

According to Reserve Bank of India (RBI) data, the total outstanding under credit cards increased 27.2 per cent year-on-year in September 2022 to reach ₹1,67,179 crore compared to ₹1,31,461 cr in the year ago period. 

In the corresponding quarter previous year, the growth in credit card outstanding was at 9.5 per cent. In September 2020 and September 2019, it was at 6.9 per cent and 25.9 percent, respectively. 

Spurt in new cards issuance

The major banks’ data show spurt in the issuance of new cards. For instance, HDFC Bank issued 1.2 million cards during the second quarter taking the total base to 16.3 million. During the quarter, it had closed 2.4 million inactive cards  in accordance with the RBI circular.

According to a senior official of ICICI Bank, the value of credit card spends in Q2FY23 grew by 12.6 per cent sequentially and was two times the value of spends in Q1 of last year driven by improvement in discretionary spending, higher activation rate through digital onboarding of customers, including Amazon Pay credit cards, and diversification through commercial cards. 

SBI Cards, too, registered 18 per cent growth in cards and 59 per cent spurt in spends year-on-year. “There has been a greater interest among the youngsters to use cards. In the new sourcing of portfolio, 37 per cent are under 30 years while 47 per cent were in the age group of 31-34,’‘ an official of SBI cards said. 

The major banks growth in resumption of card businesses is driven by removal of certain restrictions on new issuance, said an analyst adding that the close of inactive cards helped pruning of the card portfolio.

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