Indian credit card users spend 40x more than debit card users online

• Spending someone else’s money to buy things online is so much easier now thanks to credit cards, and it has caught the fancy of Indians.
  
• Credit cards, despite being less than 10% of total debit cards, are 3x more valuable as far as online spends are concerned.
  
• Credit card users also tend to spend 2x more online as compared to offline, suggesting they are more internet savvy.
  

Credit cards are still used by a tiny minority of users in India, but their spending habits reveal just how happy people are spending money they don’t have to buy things online.

According to Business Insider India research and the latest data from RBI, credit card users spend 40 times more than debit card users online. This is despite the fact that there are only 8 credit cards for every 100 debit cards issued by Indian banks.

Credit card offers, interest-free credit period of 48 days and other benefits of using a credit card mean that Indians are fast catching up with developed countries in terms of credit card use.

Consumers also prefer to pay for ‘large transactions’ using credit cards – this is evident from the average transaction value, which is three times higher for credit cards.

This suggests that consumers are using credit cards as a means to manage their finances – by passing on the burden of spending on credit card issuers, the 48-day interest free period allows consumers to ensure they have adequate liquid cash to meet their day-to-day needs.

On the whole, credit card spends on online purchases and ecommerce transactions stood at nearly ₹72,000 crore during May, while debit card purchases stood at a distant ₹21,000 crore.


Overall, Indians spent ₹93,000 crore on online purchases using credit and debit cards. This number does not include payments made via UPI, which is likely much higher.

Other surprises in store, too

Apart from the huge disparity in the value of each credit card when compared to a debit card, there are other surprises in store in RBI’s data.

According to our previous report, it’s not HDFC, ICICI, SBI or Citi Bank with the most valuable credit card holders – the award goes to IndusInd Bank instead.

In fact, India’s big private banks and SBI don’t figure in the list of most valuable credit cardholders.

On an average, credit card users spend twice as much online when compared to offline, suggesting they seek the higher security offered by credit cards while buying online.

SEE ALSO:

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

The most valuable credit cardholders are not from HDFC, SBI, Citi or other major credit card companies

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