- Demand for travel credit cards see a 27% (YOY) growth, e-commerce 24%, & fuel 17%.
- 19% (YOY) growth in New-To-Credit (NTC) consumers with almost 50% of the consumers being less than 25 years of age.
The convenience and accessibility of using credit cards are rising in India’s Tier-2 and 3 towns and cities with travel and e-commerce credit cards that saw a higher adoption rate, fuel cash-back credit cards being in top maximum demand in 2023, reports the latest consumer study by ZET.
With increasing accessibility to travel and growing aspirations for leisure among people in Tier-2 and Tier-3 towns and cities, travel credit cards also gained traction in these regions as well. Demand for travel credit cards grew the fastest in 2023, witnessing a 27% YOY growth as their offerings like air miles, hotel discounts, or travel-related rewards, are increasingly getting popular among consumers in India’s hinterland. The increasing connectivity and infrastructure development in these cities also contributed to the rise in travel credit card usage. As more people from these regions are exploring travel options, the appeal of such cards is likely to continue growing.
Due to the rising fuel expenses, fuel credit cards have gained popularity in Tier-2 and Tier-3 cities and remained in maximum demand witnessing a 17% YOY growth in 2023.
The third most popular card among India’s Tier-2 and 3 cities was e-commerce due to increased internet penetration and improved logistics and delivery ecosystem. The demand for e-commerce cards in 2023 saw a 24% YOY rise on the back of their increased popularity due to specific benefits like rewards, cashback, or discounts on online purchases.
Commenting on the trend, Manish Shara, Co-Founder, and CEO, ZET said, “In India, credit card penetration is low at just 5% of the population but we are witnessing a rise in adoption in the last two years and as per RBI’s estimates the number of credit card owners could rise to 10 crore by early 2024 from 7.5 crore in April 2022. This rise in adoption has been accentuated by factors like increased urbanisation, rising disposable incomes, growing aspirations, and the government’s push toward digital transactions. It is encouraging to see that India’s Tier-2 and 3 cities are scripting a new chapter in the growth of credit cards as we drive financial inclusion in newer markets.”
The study also suggests that there was a 19% (YOY) growth in New-To-Credit (NTC) consumers with almost 50% of the consumers being less than 25 years of age. The most preferred cards for NTC consumers were AU Small Finance Bank Credit Card, SBI Credit Card, and Axis Bank Credit Card.
Demand For Travel Credit Cards See A 27% (YOY) Growth: ZET
