Credit Card Industry Sees Slowest Growth Since October 2022, Adds Only 0.51 Million Cards in June

In June 2024, the banking industry’s addition of new credit cards slowed to its lowest rate since October 2022, with only 0.51 million new cards issued. This marks a 33% drop from May 2024, which saw 0.76 million new cards, and a 45% decrease from June 2023, which had 0.93 million new cards.

Key Points from the Report:

1. Overall Card Growth:
   • The industry added 0.51 million credit cards in June, a significant drop from previous months.
   • Cards in force increased by 17% year-on-year in June.
     
2. Card Spending:
   • Total spending on credit cards reached ₹1.58 lakh crore, growing by 15.7% year-on-year.
   • Spending volumes increased by 36.2% year-on-year to ₹357 lakh crore.
   • E-commerce spending rose to 63% of total spending, up from 61% in May, while Point of Sale (PoS) spending fell to 37%.
     
3. Market Share Changes:
   
   • CIF (Cards in Force) Market Share:
     • SBI Cards’ market share fell by 102 basis points (bps) year-on-year to 18.5%, its lowest since August 2022, but saw a slight 3 bps increase month-on-month.
     • HDFC Bank and ICICI Bank gained 11 bps and 10 bps month-on-month, respectively.
     • Kotak Mahindra Bank lost 43 bps month-on-month.
       
   • Spending Value Market Share:
     • HDFC Bank remained the leader with a 26.1% market share, despite a 211 bps year-on-year decline.
     • ICICI Bank saw the largest increase in market share, up by 241 bps year-on-year to 19.2%.
     • Axis Bank had the biggest loss in this category, dropping 48 bps month-on-month.
       
   • Spending Volume Market Share:
     • HDFC Bank led with a 26% market share, an increase of 100 bps year-on-year and 15 bps month-on-month.
     • Axis Bank experienced a significant drop, losing 258 bps year-on-year and 82 bps month-on-month.
     • ICICI Bank and SBI Card lost 17 bps and 7 bps month-on-month, respectively.

The report from Anand Rathi highlights the shifting dynamics within the credit card industry, with varying performance across different banks and sectors.