Indian financial reports indicate that applications and
approvals for credit cards have increased in the last three quarters of 2017
but the value of items purchased and frequency of usage is quite small.
Demonetisation and the ability to pay online has increased the number of credit
card applications and approvals but consumer confidence -- measured capably by
credit card use -- is still at a low.
However, India's bank industry is optimistic
that the values will pick up in the second half of December once consumers pay
for fuel and airline tickets for the holidays.
Analysts noted a drop in sales of consumer durables but
agree it has nothing to do with the trend of demonetisation. Most consumers
used their cars to spend on fuel. They speculate that as soon as old notes are
phased out, it would increase the use of credit cards.
Meanwhile, ICICI Bank sources indicate that credit cards are
being used for items such as coffee payments and keep growing weekly. It said
that the trend of higher credit card approvals versus low transactions can be
risky in the long run. Discretionary spending for higher-value items including
jewllery and consumer durables are seldom with most credit card owners.
