Health and wellness have been the top spends on credit cards since the Covid pandemic stifled people's movement and clamped down on economic activity.

If dining, travel, and aviation were usually the major spends on credit cards, now it is insurance, e-commerce, electronics, online doctor consultation, medicines, bill payments, and retail purchases like grocery, vegetables, and fruits. People are also using credit cards to refill their electronic wallets like Paytm.

SBI Card managing director & CEO Ashwini Kumar Tewari concurs: "Dining, travel, and hotel spends have shrunk, whereas online spends in categories such as departmental stores, fuel, health, utilities, education, direct marketing, apparel, and jewellery have grown."

Vijay Jasuja, former CEO of SBI Card and now a credit card consultant to Punjab National Bank, estimates the slowdown, led by affected sectors like hotel, tourism and travel, to be 12-15%. "The deceleration in credit card growth is somewhat compensated by high expenditure on online utility payments and other new areas like e-commerce," he says.

Companies have also started pushing corporate cards, which are seeing huge offtake. They are buying several items like office stationery and computer peripherals online as employees work from home. For SBI Card, the second-largest issuer of credit cards, the spends on corporate cards have spiked. But private banks are of the view that large corporate transactions will bring in only small money.

SBI Card, which got listed on the stock exchanges early this year, is bumping up the spends on cards. "Considering a significant part of corporate cards spends are travel-related, both corporate travel and bulk purchase of airline inventory by travel agents were impacted due to lockdown and government restrictions. With partial resumption of domestic air travel in the country since 25 May, the corporate card spends have seen a significant recovery. The total corporate spends grew from Rs 556 crore in April to Rs 1,244 crore in June," Tewari states.

ICICI Bank chief financial officer Rakesh Jha is of the view that bumping up the card spends by having large commercial customers, along with individual ones, will not bring in revenues. "We can bump up the spends by having a mix of very large commercial and then individual and personal customers. Now, on the commercial part, while volumes will come, it is unlikely that we will make any money out of it, or if at all, you'll make very, very tiny money out of it. And in our bank we are quite focused on two things. One is, card is an integral part of a portfolio-a personal banking portfolio because it is perhaps one of the very few products which has high frequency usage. We are quite focused that things should make money for us, and it should be fair to the customers, but it should also be fair to the bank," he said in the earnings call, the first after the Covid pandemic struck India.

In June, the SBI had 1.06 crore of cards-in-force, growing 20% from the year-ago period. The company's market share in terms of cards-in-force is at 18.3% (17.8% in Q1 FY20) and in terms of spends at 19.6% (17.2% in Q1 FY20), according to RBI data.

For SBI Card, online transactions are already at 105% of pre-Covid levels and consumers have shifted to buying things they did not previously buy online. "This trend is likely to stay, and we expect some purchases to move online permanently. There is also a paradigm shift in consumer behaviour. We have seen customers older than 50 years moving to online transactions. Also, over 60% of the new card sourcing are from tier II/III and other cities," Tewari said.