Credit card spending in India fell 5.9% to ₹2.04 lakh crore in September, marking its first annual decline since February 2021.
Why Did Credit Card Spending Decline?
Reserve Bank of India (RBI) data showed that September’s decline coincided with weaker online spending and a shift in festive purchases to October. According to CareEdge Ratings, September 2025 had benefited from tax rate cuts and the beginning of online festive sales, creating a higher comparison base.
Online credit card spending declined 12.5% year-on-year to ₹1.26 lakh crore, while spending through point-of-sale terminals increased 7.2% to ₹77,751 crore. Online transactions accounted for 61.70% of total spending, down 469 basis points from a year earlier.
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Why Are Card Numbers Still Rising
Despite lower spending, outstanding credit cards increased 10.4% to 12.53 crore, the fastest growth since November 2024. Banks added 12.62 lakh net cards in September, compared with 12.02 lakh in August.
The number of transactions rose 23.2% to 61 crore, but average transaction value declined 23.6% to ₹3,343. Average spending per card also fell 14.8% to ₹16,305.
CareEdge attributed smaller transactions to fewer high-value festive purchases, increased credit card usage through the Unified Payments Interface and weaker air travel spending. Credit card spending grew 4.9% to ₹12.18 lakh crore during the first half of FY27, although quarterly growth slowed.
Which Banks Gained Spending Share?
Private sector banks increased their share of credit card spending to 73.78%, while public sector banks’ share declined to 20.41%. However, annual spending fell 6.2% among private lenders and 9.3% among public sector lenders.
HDFC Bank increased its spending share by 165 basis points to 31.94%, supported by 7.7% annual spending growth. InCred Equities said the bank gained market share for the second consecutive month, while ICICI Bank, SBI Cards, Axis Bank, RBL Bank and Kotak Mahindra Bank lost share.
Excluding State Bank of India, public sector banks recorded 26.3% spending growth, supported by expansion into smaller towns and greater RuPay card adoption.
What Is the Outlook for Festive Spending?
The September figures reflect changing spending patterns alongside adjustments in the credit card market. InCred cited tighter issuance norms, competition from quick-lending applications and asset-quality concerns as factors affecting growth. Card issuers are also focusing on premium customers and higher-value products while reviewing rewards and benefits.
Looking ahead, Bhalerao expects October spending to reach ₹2.28 lakh crore to ₹2.38 lakh crore as festive sales begin, with November remaining strong during Diwali.
The coming months will help establish whether September’s decline primarily reflected the timing of festive purchases or a broader moderation in credit card spending.
