An Indian credit card user spends ₹14,500 a month on average – 20x more than debit card users

• Credit cards are no longer in their infancy in India, according to a new report by India’s central bank, the Reserve Bank of India.
  
• Although credit cards still remain inaccessible to a large population of the country as they require a credit score, they are already more valuable than debit cards.
  
• For every 12 debit cards out there, there is just one credit card – but quantity alone is not a good measure of the worth of something.
  

Indians use credit cards online more than they do at stores, but that is just the tip of the iceberg. While digital payments have gone from strength to strength over the last few years, credit cards have gained a lot of popularity too.

Credit cards are still not used as widely as debit cards. But, they are already more ‘valuable’ for banks and other credit card providers. That’s because people prefer to use them for ‘large transactions’ - hence catching the fancy of the big spenders.

The Indian central bank, Reserve Bank of India, has for the first time given a breakup of how Indians use credit and debit cards. Until recently, credit cards were considered a luxury but are now more valuable than debit cards.

Credit card users spend more money online than offline

According to the data released by the RBI for March 2022, the size of Indian credit card transactions online is twice the size of an offline swipe, on an average.


In total, credit card users spent three times more online than they did offline – they spent ₹68,327 crore online in March, while offline spends stood at ₹22,687 crore.

Each credit card transaction is 2x more valuable as a debit card transaction

Despite the fact that credit cards can often come with a minimum of ₹500 per year fee, credit card transactions are a lot more valuable.

According to RBI data, the average credit card transaction value stood at ₹9,600, while that of debit cards stood at a mere ₹3,900.

Credit card users spend 21 times more than debit card users

Another interesting metric that shows just how valuable credit cards are is the fact that credit card users spend 21 times more than debit card users - probably buoyed by the ‘pay later’ advantage.


On an average, a user spends ₹14,500 per credit card per month, while debit card spends stand at just ₹700 per card.

There is just one credit card for every 12 debit cards out there

As of March, 2022, there were nearly 92 crore debit cards outstanding, while credit cards stood at a mere 7.4 crore.


This is one of those instances where quantity is not a good measure of the value of something.

Yet, credit cards are more valuable than debit cards

Even though debit cards outnumber credit cards by a massive margin, the total value of transactions entered into by debit card users is a lot lower than that of credit cards.


Overall, credit card users transacted over ₹1,07,000 crore in March, while debit card users stood at ₹91,500 crore. This includes the cash withdrawals at ATMs.

Credit cards vs debit cards vs UPI usage compared

Unified Payments Interface (UPI) has been a game changer in terms of how India pays – from the roadside vendor to high-end retail chains and jewelry merchants, UPI is almost universal across India.

Nothing explains the sheer scale of UPI than this chart below.


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