Development

Sri Lanka’s credit card debt expanded at a slower pace in July, even as overall credit in the economy grew faster, supported by low interest rates and improving consumer sentiment. Outstanding credit card balances rose by Rs. 373 million in July, easing from increases of Rs. 539 million in June and Rs. 534 million in May, Central Bank data showed. This brought the total increase for the first seven months of 2025 to Rs. 3.23 billion. The total outstanding balance at the end of July stood at Rs. 161.28 billion, up 7.7 percent from a year earlier.

Analysts said the slower growth in card debt might reflect stronger household finances, as consumers relied less on costly credit card borrowing despite rising spending. Credit card rates remain as high as 26 percent compared with around 15 percent or lower for other consumer loans. To stimulate card usage, banks have been offering repayment options that resemble short-term personal loans, such as cash advances with equal installments. They are also ramping up issuance, with 12,325 new cards issued in July which was above the monthly average of about 11,200 in the first half of the year. The number of total active cards reached 2.09 million at the end of July, with 79,613 new cards issued in the first seven months.