The festive season that has just passed by has given a reason to smile to the credit card issuers in the country. Banks have recorded a higher consumer spending in the month of October as compared to the same period a year ago. This growth has been seen during the period preceding Diwali.

Credit card transactions generally go up during some specific seasons but this time the growth is substantial. Banks ICICI Bank, HSBC and HDFC Bank admit an increase in their credit card transactions.

ICICI's head of cards product group, Sachin Khandelwal said that this October, bank has clocked a 15% growth in point of sale transactions (POS) against the last year. "This may be because new cards have been issued especially debit cards, approximately 12 million of which were added since Diwali last year," Khandelwal said.

Managing Director of HDFC, Aditya Puri said that his bank has recorded a highest-ever POS card swipes this year. In October POS transactions of the bank went up to 90 lakh from 60 lakh recorded in the same period last year.

HSBC has also recorded a hike in its card transactions and a spokesperson from the bank said, "Our volumes are up and because our minimum transactions are higher the value of transactions may also be up."

On the other hand private lender like ICICI has not seen a rise in their value of transactions. "The average ticket size more or less remains the same. But there is a possibility that cash spends have come down. The normal break up is 95% cash and 5% through cards but in some places like Big Bazaar and other large retail outlets we are beginning to see close to 50% of the transactions through cards," Khandelwal said.

However Mr Khandelwal believes that it is unlikely for this trend to continue. "Do not expect this to continue, there will be a slow down, as already seen from August. This was a festive season aberration, that too since most festivals came all together in the month of October this year, unlike last year when they were spread across both October and November," he said.

The style of consumer spending in the country is changing via the rise in debit cards and point of sale terminals especially in the shopping malls that are developing in the cities. Although these card companies may cheer at this hour but there are chances that this rise in card transaction may result into a panic as the default rate that is already soaring high may rise amid the crisis.