September credit card debt rises by Rs.1.5bn

• Nine-month credit expansion hits Rs.7.7bn

​Spending by credit card holders continued to rise through September, although at a slower pace compared to a month ago, while the number of new cards issued by banks rose to nearly 15,000.

​According to the latest data available through September 2025, licensed commercial banks expanded their total outstanding credit card balance by Rs.1,481 million in September, bringing the total outstanding stock to Rs.165.65 billion.

​While this marked a continued increase, it was a slowdown from the Rs.2,889 million expansion recorded in August. The September expansion brought the cumulative card debt growth for the first nine months of the year to Rs.7.69 billion.

​Total private sector credit also grew by the widest margin in September, with licensed commercial banks disbursing as much as Rs.236.3 billion in fresh credit, recording the highest-ever monthly disbursement. September marked the fourth consecutive month where private sector credit growth exceeded Rs.200 billion.

​Although the increase in credit card debt indicates the direction of consumer spending, it remains a distant proxy, given how little credit cards are used in Sri Lanka for day-to-day transactions compared to cash. As of the end of September 2025, there were only 2,117,378 cards in use.

​However, there was a notable pickup in new card issuances in September, with banks issuing 14,841 new cards during the month, a figure higher than the monthly average observed through August.

​Despite the slowdown in September, the ongoing season could ramp up spending by cardholders as banks increase offers and discounts in view of the year-end festivities.

​Potentially, interest rates on credit cards could witness a downward adjustment in the near future, as rates currently hover between 24 and 26 percent for outstanding balances. This comes at a time when the Average Weighted New Lending Rate stood at 10.27 percent in September.

​The measured growth in card debt also suggests that households are not under the same level of financial stress witnessed a couple of years ago.