Why Credit Card Spending in India is Rising? Which Companies will be benefited from Rising Credit Card Usage?
2 min readRecently, credit card spending in India touched all-time high levels of Rs. 1.16 trillion which has led to the rising interest of investors and institutions. So, let’s check out why and how these credit card spends are rising in India and which company will benefit from the upcoming and untapped opportunity.
Credit Card Market- Highly Underpenetrated in India:
- The Credit Card Market in India contributes merely 3.4% which means that out of 100 individuals only 3-4 individuals own credit cards. It is highly under-penetrated as compared to others like the US where the penetration rate is 300%.
- The credit card ownership of 100 individuals is 49 in China, 88 in Brazil, and 85 in Australia.
- In July 2022, credit card spending in India was the highest ever at Rs. 1.16 Lakh Cr. This credit card spending is consistently above the mark of Rs. 1 Lakh Cr. for the past 5 months.
Why Credit Card Spending are Rising?
- It is because there is an increased amount of credit card issuance in the recent past. The new credit card issued figure was only 14.1 Lakh in December 2020 which now stands at 51 lakhs in June 2022.
- This high growth in credit card issuance is mainly driven by:
- Opening up of the economy
- Festive Seasons
- Partnership with Fintech & E-Commerce players
Market Leader in Credit Card Market:
i) Market Share of Credit Players based on Credit Card Spending:

ii) Market Share of Credit Players based on Outstanding Credit Cards:

What Should Investors Do?
The Only listed player in the credit card industry in India is SBI Cards. Hence, this company is expected to be positively benefited from the under-penetration in the industry and growth prospects. But the company also may face some challenges like Increasing UPI payment, competition from other players, chances of losing scarcity premium once peers get listed, and many others. Hence investors looking to invest in this counter should properly assess the fundamentals of the company and then only should proceed to invest. One should follow due diligence before making investment decisions.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.