Credit Card Spends Accelerated in Dec on Wedding, Festive End Season
MUMBAI: The onset of the wedding season and year-end spends led to a 14 per cent rise in credit card spends in value terms to Rs 1.88 lakh crore in December 2024. This came after lenders reported a fall of 16 per cent in credit card spends in November to Rs 1.7 lakh crore. The credit card spends in volume terms for December grew 35 per cent year on year to Rs 4.33 lakh crore. Most of the spends were through online shopping using credit cards due to attractive discounts and deals offered by e-commerce platforms. No-cost EMI option also emerged as a powerful motivator for online purchases. As a result, the value composition of PoS and e-commerce changed 139 basis points with the latter securing a higher share (61 per cent in December versus 60 per cent in November 2024) and the former at 39 per cent versus 40 per cent the month prior. However, PoS and e-commerce volumes continued to move in favour of the former, now at 52 per cent, while the latter’s share declined to 48 per cent.
Last week during its Q3FY25 earnings call with analysts, the Kotak Bank management acknowledged the strain caused by the RBI ban on its digital operations. Historically, the unsecured book—including credit cards, personal loans, and microfinance—has accounted for 15 percent of total assets. However, the crackdown has reduced this share to 10.5 percent, well below their target.