New credit card issues down 45% year over year in October: report

The credit card sector witnessed a sharp correction of 45 percent year-on-year in October as the issuance of new credit cards declined to 7.8 lakh compared to 16 lakh cards issued last year during of 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 from the 7.6 lakh added in May 2024. However, this figure marks a significant drop of 45% over one year. -year (y/y) of the 16 lakh cards added in October 2023.

He said: “The industry added 0.78 million credit cards during the month, compared to 0.76 million in May 2024 and 1.6 million in October 2023, down 33% month-on-month and 45% over one year. »

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 those in June 2024, contributing to a 16 percent quarter-on-quarter (q/q) increase in cards in force.

The report also highlights that total credit card spending reached Rs 1.78 trillion in October 2024, a year-on-year growth of 13 percent. In terms of transaction volume, spending increased by 35.4% year-on-year to Rs 433 trillion during the month.

The mix of spending between point-of-sale (PoS) transactions and e-commerce has changed.

According to the report, the share of e-commerce in total spending value fell to 61% in October 2024 from 65% in September 2024, while PoS transactions increased their share to 39% from 35% in the previous month.

The report states: “Point-of-sale and e-commerce volumes continued to trend in favor of the former, now around 51 percent, while the latter’s share declined to around 49 percent. »

In terms of transaction volumes, the preference continued to shift towards PoS transactions. PoS transactions now account for around 51 percent of total credit card transactions.

Although growth in card additions and spending has slowed compared to last year, the industry is showing signs of gradual improvement. The increase in the number of cards in force and stable spending trends indicate a steady recovery in the credit card market, even as changes in spending habits emerge.

The data reflects a cautious but positive outlook for the credit card industry amid evolving consumer preferences.