Correlation between spending data and GDP data.

India has witnessed an unprecedented surge in monthly credit card spending, marking a significant financial trend. Over a span of just three years, average monthly credit card spending has doubled, soaring from 60,000 Crores in 2019 to a staggering 1.2 Lakh Crores in 2022-23. This surge is further exemplified by the record-breaking circulation of 87.4 million credit cards as of May 2023.

Indians are exhibiting remarkable spending habits, with UPI transactions surging past the 10 billion mark in August 2023. A substantial sum of 15,760 Crores was transacted via UPI during this period. Interestingly, these financial dynamics appear to be closely aligned with India's GDP growth, which stands at an impressive 7.8% as of August 2023. Nifty companies are reporting record earnings, and Nifty is at a all-time high.

In this landscape of heightened financial activity, it's crucial to keep an eye on key players in the credit card sector. SBI Cards, HDFC Bank, and ICICI Bank currently dominate the credit card market in India.

Now, the question arises: What exactly are people spending on? Notably, trends indicate that individuals are allocating their funds towards categories such as travel, entertainment, luxury products, rent, and education. Of particular interest are two newcomers to the spending arena: rent and education expenses. The increase in these expenditures could be attributed to various factors, including the allure of reward points and the availability of incentives such as convenient EMI options. These elements collectively contribute to the evolving landscape of Indian consumer spending. 

In a few months, we may notice the overall credit card debt per to be increasing as well. While a minor increase is part of the game, but any substantial increase will be cause for alarm.