Why Indians are getting more, and using more, credit cards - The Week Magazine

Why Indians are getting more, and using more, credit cards

Credit cards can become debt traps if dues are not paid regularly

www.theweek.in

CREDIT CARDS HAVE been around for a few decades. In fact, it is the primary mode of payment for purchases in many countries. But in India, they had never really taken off as they were seen as being out of bounds for most of the salaried, and retailers were reluctant to accept them.

That is, however, a thing of the past. Not only are more and more people getting credit cards, but also they are using them more frequently. The most recent data on payments and settlement systems by the Reserve Bank of India says the number of active credit cards in India was 9.13 crore in August 2023. It was just 7.8 crore a year before that—that is a 17 per cent growth. In January 2020, it was just 5.6 crore. So, in some three and a half years, the number of credit cards surged 63 per cent.


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[BlueFlash]

And here I am, only getting more and more credit cards, but not using them XD
LTF FTW

 

[Yugi]

There has been more financial awareness thanks to social media and other forums that people are realizing the benefits of credit cards. Credit cards were considered a sin and now knew how they worked, what are charges and if it carries any interest for purchasing goods and paying later. Now, the information is widespread, there is transparency by easily logging into portals and looking at the transactions done, which is not the case 10-15 years back. Also, there is increased adoption of credit card with the merchants too. These are some of the factors which are pushing for more credit card adoption.

 

[P B R G]

Finance youtubers, instagram influencers and forums like this are influencing the youths to opt for more and more credit cards as they are getting familiar with advantages of using a CC.

Merchant offers on products especially likes of BBD and AGIS are forcing people to get atleast one or two Credit cards in order to not miss out on huge discounts.

More people are getting financially educated as they start earning and using digital payments.

 

[iamdhamo]

My take is previous generations believed in saving and buying but this generation buys first and then thinks of saving

 

[SSV]

My take is previous generations believed in saving and buying but this generation buys first and then thinks of saving

Very true...

Previous generation: Buying occasionally from Savings..!!

Present generation: Buying everyday and saving occasionally.. !!!

TFians : Saving while buying everyday ...

 

[Eye of Ajay]

One word "RPs"

I swear this morning there was talk of a certain company paying their electricity bill of 14cr with a corporate card but sadly the amount was too large and had to be paid in two parts.

 

[Riya]

And here I am, only getting more and more credit cards, but not using them XD
LTF FTW

Same pinch dude!!!

 

[Riya]

One word "RPs"

I swear this morning there was talk of a certain company paying their electricity bill of 14cr with a corporate card but sadly the amount was too large and had to be paid in two parts.

WTF!!! 14cr with credit card 😳😳
Don't tell me the guy's the richest Indian

Who the hell pays 14Cr monthly electricity bill 🤣🤣🤣

 

[srikant]

WTF!!! 14cr with credit card 😳😳
Don't tell me the guy's the richest Indian

Who the hell pays 14Cr monthly electricity bill 🤣🤣🤣

This is a COMPANY, not an individual!

 

[Pankhuri]

There has been more financial awareness thanks to social media and other forums that people are realizing the benefits of credit cards. Credit cards were considered a sin and now knew how they worked, what are charges and if it carries any interest for purchasing goods and paying later. Now, the information is widespread, there is transparency by easily logging into portals and looking at the transactions done, which is not the case 10-15 years back. Also, there is increased adoption of credit card with the merchants too. These are some of the factors which are pushing for more credit card adoption.

Social media and other forums are pretty small when it comes to finance. Most of the people are getting more and more cards because having cards became trendy and banks have given up all pretenses of due diligence when it comes to issuing credit cards.

 

[Deleted member 9785]

with layoffs and job insecurity, the new generation will soon understand the You live only once pitfalls.

 

[Dr. Drake]

with layoffs and job insecurity, the new generation will soon understand the You live only once pitfalls.

that is true but it's pretty easy making money this days then what it was 10Yrs back. It's pity but with social media even trolls/meme/lip sync are earning heavily (not even exaggerating saw it live)

 

[Deleted member 9785]

that is true but it's pretty easy making money this days then what it was 10Yrs back. It's pity but with social media even trolls/meme/lip sync are earning heavily (not even exaggerating saw it live)

thats just 0.25% of the total people who try to be actully make it on social media. 99.75% waste time and fade away

What Percentage of YouTubers Make Money? [Shockingly Low]

Make money on online with youtube videos seems easy but what percentage of youtubers make money? You'll be surprised.

alanspicer.com

 

[Deleted member 9785]

that is true but it's pretty easy making money this days then what it was 10Yrs back. It's pity but with social media even trolls/meme/lip sync are earning heavily (not even exaggerating saw it live)

2008 recession resulted in low interest rates and lots of asset bubble and high salaries and hiring as companies dint think at all due to 0% money

Now even top b schools are struggling -

My only point is save first and spend later

 

[Riya]

that is true but it's pretty easy making money this days then what it was 10Yrs back. It's pity but with social media even trolls/meme/lip sync are earning heavily (not even exaggerating saw it live)

Seriously!!! All the education and skill set we acquired over the years look small in front of a lunatic act on social media....

 

[Survivor35]

Seriously!!! All the education and skill set we acquired over the years look small in front of a lunatic act on social media....

Serious ,these days every TOm DICK Harry is a celebrity,either bcoz of Unique acts which go viral or due to their weird antics,

Good Content nowdays is rare but does always help...

 

[Ramplestillskin]

One word "RPs"

I swear this morning there was talk of a certain company paying their electricity bill of 14cr with a corporate card but sadly the amount was too large and had to be paid in two parts.

14cr they would get so many RPs no wonder HDFC limits apple products to 5

This is a COMPANY, not an individual!

That makes it clear for sure

 

[SamPtnk]

75% user base is using to rotate money

25% normal use

 

[dduseracc]

This is bound to happen with every other Bank due to Increase in Credit card holders/Viral Reels/Misuse of cards or Features

Just a decade ago, credit cards were a rarity, with stringent eligibility criteria But Here we are


The total number of credit cards issued increased from 4.33 crores as on 31st December 2004 to

97.9 million outstanding credit cards, with a record 1.9 million additions during the month alone As of December 2023
With such craze of these plastic cards , Credit card providers are trimming benefits

In the fast-paced world of finance, credit cards have long been our trusted companions, offering a myriad of benefits and rewards. However, if you're an avid credit card user, you may have noticed a recent trend – the devaluation of these once-lucrative benefits

In the financial year 2023, there were around three billion transactions made via credit cards across India

Credit card issuance has grown significantly in India at a compound annual growth rate (CAGR) of 20% in the last four years

Among the private sector players, HDFC Bank continued to lead with 19.81 million cards in circulation in December 2023
Other players include ICICI Bank with 16.48 million, SBI Card with 18.48 million cards and Axis Bank with 13.58 million.

While point of sale transactions dipped slightly to ~58,300.18 crore from ~59,014.93 crore in November, e-commerce payments rose to ~1.06 trillion

This represents an 81% increase in the number of active credit cards in the country

Credit card transactions in Dec 2023 reported a 32 per cent year-on-year jump from ~1.25 trillion in December 2022, reflecting a robust expansion

Along with the number of credit cards issued, the spending through them was zooming too.

Credit card spending hit a fresh record high in October 2023 when it reached Rs 1.72 lakh crore
And in the past three months, Indians have spent nearly Rs 5 lakh crore via credit cards – nearly 2% of India’s total GDP



With greater credit card adoption and rising spends, defaults are rising too
In 2022-23, credit card defaults stood at Rs 4,072 crore, which was over Rs 950 crore higher than the default of Rs 3,122 crore in 2021-22

Fun Facts - Banks in India having a networth of Rs 100 crores and above can undertake credit card business either departmentally or through a subsidiary company set up for the purpose

Key trends in the credit card space
Some of the key trends in the credit card space are analyzed below:

• FinTech disruption: A number of FinTechs, new-age banks and original equipment manufacturers (OEMs) have entered the credit card issuance space. These players are entering into co-branded partnerships with banks and providing customers with the best in-class services.
• Better mobile apps: Customers today expect better mobile applications with best-in-class user-experience(UX)/user-interface (UI), features and do-it-yourself (DIY) services. A number of issuers have already started working on this front.
• New risk models: Card issuers are exploring various new credit risk models apart from the traditional credit rating model. These models can cater to customers with and without a credit score.
• Contactless payments: Customers are preferring mobile-based contactless, QR and token payments
  Fun Facts - In a research, it is found that 37 per cent of new credit score consumers are under 25.
  
  Who knows what future holds But for now credit card pandemic is gripping India
  👳