India witnessed a significant 24% surge in credit card spending in March, amounting to Rs 2,194 billion, driven by seasonal influences and a low base. Despite this spike, the year-on-year growth stood at a more moderate 8.9%, as per a report by Asit C. Mehta Investment Intermediates. The report emphasized that the sudden rise in monthly spending does not signify a lasting increase in demand but rather reflects seasonal expenditure patterns and statistical effects as the sector moves towards a more normalized growth trajectory.
The total number of credit cards in circulation saw an 8% year-on-year increase, reaching approximately 118 million, indicating a steady expansion of the user base. Moreover, the issuance of new credit cards remained robust, with around 0.93 million cards issued in March, marking a 7.96% rise from the previous year. This growth was primarily fueled by customer acquisition rather than a sharp escalation in spending per user.
While the average spend per card surged by 22.8% on a monthly basis, showcasing seasonal momentum, the year-on-year increase was marginal at just 0.9%. Similarly, the average spend per transaction saw a monthly rise but displayed a declining trend compared to the previous year, suggesting limited enhancement in consumption intensity.
A previous report highlighted a 6% year-on-year growth in credit card spending in India for February, with a month-on-month decline to Rs 1,772 billion, marking an 11% moderation. During that period, 1.05 million new cards were issued, reflecting a 7.7% increase from the previous year.
