Consumption demand has returned with a vengeance, with banks reporting record-high credit card spends in June and July, even exceeding Diwali season figures from last year.
Banks and others expect the momentum to continue, with credit card spending exceeding all previous records during the festive months, India’s peak consumption season.
Many of them, including hdfc bank, axis bank, and kotak mahindra bank nse 0.49%, which have been aggressive in signing up credit card clients in recent months, have lined up new offers to encourage customers to use their cards for holiday purchases.
“The June credit card spend figures were very strong, indicating increased consumer confidence, and those characteristics are continuing in July.”
“The june numbers on credit card spends were very strong, which indicates increased consumer confidence, and those traits are continuing in july and the early part of august,” said sumi bali, Axis bank’s head of retail banking.
“We anticipate that spending will peak in October.” Spending across categories was very good, whether it was for a tour, enjoyment, or discretionary.”
Hdfc bank, the market leader in credit score cards with a greater than 22% share, is preparing to launch the fourth edition of ‘festive treat,’ a programme to encourage spending on its cards during the holiday season. Under the programme, it will make over 300 national offers and over 9,000 regional offers.
“Our holiday treat plan would include all segments of service provider partners in order to provide great usage offers to customers.” This could include collaborations with large ecommerce partners such as Amazon and Flipkart, meal delivery partners such as Swiggy and Zomato, travel companions such as Makemytrip and Goibibo, and splendour partners such as Myntra and Nykaa,” said Parag Rao, group head – payments at HDFC Bank.
“There are new products in collaboration with strong partners to address the shopping, lifestyle, and travel segments.”
According to rbi data, the United States of America’s banks reported a net addition of 1.8 million credit cards in June. This brought the total number of credit cards to 78.7 million, up 25.3% from a year ago.
Hdfc bank topped the list for new customer signups, with over 3,86,000 cards added, followed by kotak mahindra bank (2,63,000) and axis bank nse 0.03%. (2,29,000).
According to Ambuj Chandna, president of consumer assets at Kotak Mahindra Bank, the issue and use of credit cards has increased as risk models across the industry have stabilised.
A rise in travel and increased spending on items such as clothing also point to a broad-based total consumption revival, which is increasing spending on playing cards, he said, adding that “we’re touching life-time highs every month now; so the festive season looks very promising.”
A new entrant in the card space, idfc nse -0.55% bank, has also prepared lucrative offers in collaboration with merchants for the holiday season.