From rent to grocery, credit card business is growing rapidly on the strength of youth, doubled in 3 years – reward points and freebies push credit card spends to record levels, yourh is the biggest customers

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New Delhi:Credit card usage is touching a record high, thanks in large part to rewards points and freebies attached to purchases made through it. Due to the rapid rise of fintech, according to an Economic Times report, young customers are paying for almost everything from house rent to groceries through their cards linked to some or the other app. From RBI data It is learned that the average monthly spending through credit cards has doubled in three years from ₹60,000 crore in FY 2019-20 to ₹1.2 lakh crore in 2022-23. In May this year, the transaction value reached a record 1.4 lakh crore.

Even though other alternate modes such as UPI, debit cards or platforms like NEFT/RTGS are witnessing strong transactions, credit card spends have seen a sharp rise since last year. Experts say that many categories of expenditure which were not present earlier are now seeing a huge boom. Mohit Bedi, co-founder and chief business officer, Kiwi, said, “These include areas such as domestic travel and entertainment, luxury spending and rentals. Now you will see education as an emerging category.

He said that due to partnerships with companies like Flipkart and Amazon, 2-2.5 lakh customers are being added to the credit card every month. This process is going on for the last 18 months.

Apart from all this, people in the age group of 30-40 who used to use credit cards sparingly earlier are now using it extensively. In fact, what is luring customers towards using credit cards is the number of reward points, discounts and other freebies offered. Even small players in the market are coming forward to offer such freebies.

Chitrabhanu KG, Senior Vice President and Country Head, Retail Assets & Cards, Federal Bank said, “The credit card offers high rewards and other freebies because it is a 2 in 1 product i.e. it has both loan and payment options. see you. Hence, it has a higher earning potential for banks as compared to products like debit cards.

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