It has been brewing for sometime now, credit card spending is on the decline. The recession has tightened the purse strings of individuals who may have temporarily shelved their credit cards. An indication of some such development is evident by the figures discovered during a survey for credit card spends and usage patterns.
Credit card spending in the country has slumped by more than 12 per cent in the first five months of this fiscal to nearly Rs 24,427 crore as compared to Rs 27,834 crore for the same period last year. Transactions had started declining towards the end of the last fiscal itself but total transactions of Rs 65,355 crore had been achieved in the complete financial year, according to the Reserve Bank.
The decline in payment indicates adverse impact of financial meltdown on India. It is also an indication of the fact that retail consumers have become cautious in taking credit to make their payments. Another contributing factor could be that some banks have reduced credit limits given in cards.
Conversely, use of debit cards has been on the upswing with debit cards being used to the tune of Rs 9,911 crore as compared to Rs 7,017.63 crore last fiscal.