|Increase in the consumption expenditure of the consumers and reduced defaults on repayments have seen new credit cards issuance on the rise again. The April-June period saw banks issuing nearly 3.6 lakh new credit cards.
At the end of first quarter, the number of credit cards in circulation stood at 1.80 crore against 1.76 crore in the corresponding period year ago. HDFC Bank led the new credit cards issued accounting for about 1.97 lakh cards, more than half of the cards issued.
Standard Chartered Bank, State Bank of India and Axis Bank followed by issuing 1.61 lakh 96.7 thousand and 45.5 thousand cards respectively. Banks over the last few years have been discarding inactive cards.
"We have seen growth in cards where the annual fee is low. We are also planning to push the platinum and signature cards, targeting high net worth individuals, because of their compelling value proposition," said Kadamabi Narahari, CEO SBI Cards and Payment Services Pvt. Ltd.
On the other hand ICICI Bank, Royal Bank of Scotland and HSBC Bank saw a reduction in new credit cards issued. This is probably because the banks are still cutting down on their inactive cards.
Banks are relying more on credit score for issuing new cards. Banks are offering attractive options to attract more customers by providing better rewards points conversion into air or movie tickets, and vouchers for lifestyle and clothing/accessory. Another new trend is issuing of co-branded cards with airlines or petroleum companies.