There was a modest increase in credit card spending in April, reflecting that consumers are gradually boosting their expenditures on essentials as well as discretionary items such as dining out and recreational activities, supported by easing prices and declining interest rates.
Data for April showed that licensed commercial banks extended credit card debt amounting to Rs. 4,381 million during the month. This rise is partly attributed to the festive season when people tend to spend more on food staples, durable goods, leisure, dining, and other activities.
Though the growth in outstanding credit card balances in April was relatively small, it coincided with Rs. 87 billion in total private sector credit for the month. However, credit card spending does not fully represent overall consumer spending, as many still rely heavily on cash transactions.
Additionally, much card spending does not appear in outstanding balances since many cardholders pay off their dues before the due date.
Despite the noticeable expansion in outstanding credit card balances in April, the total growth for the first four months of 2025 was only Rs. 1,879 million, indicating that cardholders have yet to significantly increase their use of credit cards for purchases.
The current credit card interest rate of 26 percent remains relatively high compared to other lending rates, making it restrictive and in need of reduction.
In April, banks issued 16,812 new credit cards, bringing the total new cards issued in the first four months to 47,038. By the end of April, the total number of credit cards in circulation reached 2,055,494.
Banks have also been running aggressive campaigns to encourage card usage by offering attractive incentives and flexible payment schemes.
