New Delhi: The credit card industry witnessed a sharp correction of 45 per cent year-on-year in October as the new credit card issue declined to 7.8 lakh from 16 lakh cards issued last year during the same month.
According to a report by Anand Rathi, the credit card industry added 7.8 lakh new credit cards in October 2024, a slight increase compared to the 7.6 lakh added in May 2024. However, this figure marks a significant decline of 45 per cent year-on-year (y/y) from the 16 lakh cards added in October 2023.
It said, "The industry added 0.78m credit cards in the month vs 0.76m in May'24 and 1.6m in Oct'23, down 33 per cent m/m, 45 per cent y/y."
However, it also noted a steady recovery in October 2024, with a decent pace of growth in card additions and improvement in cards in force (CIF). Despite this decline, net additions in October 2024 were higher than in June 2024, contributing to a 16 per cent quarter-on-quarter (q/q) rise in cards in force.
The report also highlighted that the total spending through credit cards reached Rs 1.78 trillion in October 2024, reflecting a 13 per cent year-on-year growth. In terms of transaction volume, spends grew by 35.4 per cent y/y to Rs 433 trillion during the month.
The composition of spending between point-of-sale (PoS) transactions and e-commerce showed a shift.
As per the report, e-commerce's share in total spending value dropped to 61 per cent in October 2024 from 65 per cent in September 2024, while PoS transactions increased their share to 39 per cent from 35 per cent in the previous month.
The report said, "PoS and e-commerce volumes continued to move in favour of the former, now approx. 51 per cent, while the latter's share declined to approx. 49 per cent."
In transaction volumes, the preference continued to move towards PoS transactions. PoS transactions now account for approximately 51 per cent of total credit card transactions.
While the growth in card additions and spending has slowed compared to last year, the industry is showing signs of gradual improvement. The increasing cards in force and stable spending trends indicate a steady recovery in the credit card market, even as shifts in spending habits emerge.
The data reflects a cautious but positive outlook for the credit card industry amid evolving consumer preferences. (ANI)