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Sri Lankan credit card holders stepped up spending in August, reflecting rising consumer confidence and improving household incomes amid an expanding economy. Credit card debt rose by Rs.2.89 billion during the month, a sharp increase from Rs.373 million in July, as overall private sector credit continued to accelerate. In June, total outstanding credit to the private sector by the licensed commercial banks rose by a robust Rs.221.6 billion, followed by two consecutive months of over Rs.200 billion in new credit in July and August. With the flare-up in credit card debt in August, total outstanding credit card debt expanded by Rs.6.21 billion to Rs.164.17 billion by the end of the month. The increase in credit card spending comes even as interest rates on credit cards remain around 26 percent per annum, which is considerably higher than other prevailing lending rates. The recent jump in credit card debt may also reflect consumers spending more on essentials and gradually returning to discretionary categories such as recreation, dining out and leisure activities. However, the rise in credit card spending does not fully capture the broader picture of consumer behaviour, as the number of cards in use in Sri Lanka remains limited, though it has been growing steadily in recent months. There were 2,102,537 active cards in Sri Lanka in August, up from 2,088,069 in July, reflecting 14,468 new cards issued.In the first eight months of the year, the licensed commercial banks issued a total of 94,081 new credit cards