As India enters the festive shopping season, credit card usage has witnessed a significant surge. Analysts attribute this trend to a combination of festive sales, discounts, and recent GST reductions, which have encouraged consumers to spend more on both essential and luxury items.
Factors Driving Increased Credit Card Usage
Festive Sales and Discounts
Retailers and e-commerce platforms are offering attractive discounts and cashback offers to lure buyers.
Consumers prefer using credit cards to avail of reward points, EMI options, and exclusive cardholder deals.
Recent GST Cuts
Goods and Services Tax (GST) reductions on certain categories, including electronics, apparel, and home appliances, have lowered prices, making big-ticket purchases more appealing.
Shoppers are increasingly using credit cards to manage these purchases efficiently.
Easy EMI Options
Credit cards offer interest-free EMIs, enabling consumers to buy expensive items without immediate financial strain.
This flexibility drives higher transaction volumes during the festive season.
Growing Digital Payment Adoption
Consumers are increasingly opting for contactless and online payments, contributing to higher credit card usage.
Banks report record transaction volumes on their credit card networks during this period.
Impact on Consumer Behavior and Economy
Higher Consumer Spending: With attractive deals and easier payment options, spending patterns are becoming more consumption-oriented.
Boost for Retailers and E-Commerce: Increased transactions translate to higher sales, benefiting both offline and online businesses.
Financial Planning Trend: Consumers are strategically using credit cards for rewards, points, and EMI benefits, reflecting smarter financial planning.
Expert Opinions
Financial analysts suggest that festive seasons, coupled with tax reductions, often lead to a spike in consumer spending. Credit cards remain the preferred medium due to convenience, safety, and financial incentives. However, experts advise responsible usage to avoid high-interest debt post-festivities.
FAQs:
Q1. Why is credit card spending rising now?
Festive sales, GST cuts, and attractive cashback offers are driving increased usage.
Q2. Which purchases are seeing the most credit card transactions?
High-value categories like electronics, apparel, home appliances, and jewelry.
Q3. Are EMIs influencing spending patterns?
Yes, interest-free EMI options encourage consumers to make big-ticket purchases with credit cards.
Q4. How do GST cuts affect consumer behavior?
Reduced GST lowers prices, making purchases more affordable and encouraging higher spending.
Q5. Should consumers be cautious while spending?
Yes, while credit cards offer benefits, overspending can lead to high-interest debt if balances are not cleared on time.
Published on : 30th September
Published by : SMITA
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