India Sees Record Credit Card Spending and New Additions in September Fueled by Festivals and Tax Cuts

Central bank data reveals that India experienced record-breaking credit card activity in September. Total monthly spending on credit cards surged past ₹2.16 lakh crore, marking a substantial 22% rise compared to the previous year and a 13% increase from the month before. E-commerce platforms were the dominant spending channel, accounting for over ₹1.44 lakh crore, while point-of-sale transactions contributed more than ₹72,000 crore.

Adding to this momentum, nearly 1.1 million new credit cards were issued in September, pushing the total number of active credit cards in circulation to 113.3 million. This represents a significant jump from the less than 700,000 cards added in the same month last year.

The surge is attributed to a combination of factors. The ongoing festive season encouraged higher consumer spending, particularly on discretionary items. Furthermore, the government's decision to slash Goods and Services Tax (GST) slabs from September 22nd made a wide range of consumption goods more affordable, directly boosting purchasing power. Experts suggest consumers are increasingly using credit cards strategically for festive deals and rewards, highlighting a growing preference for the value and convenience these cards offer.

Impact This news indicates strong consumer sentiment and spending power, which is positive for companies in the retail, e-commerce, and financial services sectors. The increased credit card usage suggests robust economic activity. This trend is expected to continue into October due to sustained festive promotions and discounts. Rating: 8/10

Difficult Terms Explained: GST (Goods and Services Tax): A consumption tax levied on the supply of goods and services, with different rates applied to various items. Slashing GST slabs means reducing these tax rates for many products. Year-on-year growth: The percentage change in a metric compared to the same period in the previous year. Sequential growth: The percentage change in a metric compared to the immediately preceding period (e.g., month-over-month).