Credit Card Additions and Expenses Climb Fastest May In recent quarters, underscoring the fading effect of Covid-induced disruptions on consumption habits, a growing number of urban Indians have taken long holidays and bought high-ticket discretionary items after being nearly padlocked for two consecutive summers.

The banking industry added 1.7 million cards in May, the highest in 27 months. Extraordinary Loan It was the highest ever on credit cards, breaking the ₹1.54-lakh-crore mark.

“The latest data shows that credit card spend have been very strong, touching an all-time high (up 8% MoM) in May 2022,” said Suresh Ganapathy, associate director, Macquarie Capital. Bounce rates in value terms are also at a three-year low. These figures There are indications that the retail economy is strong.”

To be sure, a change in rate trends could affect spending on borrowed funds. IndiaThe central bank has raised rates twice in a one-month period since the beginning of May to rein in inflation.

“However, with interest rates expected to rise sharply in the next few quarters, we need to see if the current trends are sustainable,” Ganapathi said.

The latest trend in credit card spending patterns indicates rising consumer confidence.

Among popular retail payment channels, spending via credit cards increased in April, both in terms of volume and value. The value rose nearly four-fifth to ₹1.05 lakh crore in April, while NEFT transactions grew 22% and debit card spends grew 16%.

In terms of volume also, credit card spends grew by 42%, while NEFT transactions grew by 30% and debit card spends grew by 16%. The only exception was UPI transactions, which more than doubled during this period.

Credit card dues, or the amount due to banks after the end of the credit period, rose nearly one-fifth to ₹1.54 lakh crore as compared to ₹1.28 lakh crore in the same period a year ago. Credit card spend grew 8% sequentially and 118% year-on-year to 1.14 lakh crore in May 2022.

according to an analysis

, and saw the highest spending growth sequentially. American Express saw its spending drop 2% compared to April.

Nitin Agarwal, Head of Research at BFSI said, “Spends remained strong and continued their healthy momentum due to the increasing share of e-commerce transactions, which will lead to an increase in spends.”

, “Players like, and will continue their strong performance, while seeing a strong recovery which is likely to continue.”

HDFC Bank emerged as the largest acquirer with 385,000 new cards, followed by Axis Bank, ICICI Bank and SBI Cards with over 200,000 cards sold. Kotak Mahindra Bank also sold 181,000 new cards.