India’s Credit Card Spending Nears ₹2 Lakh Crore Amid Growth Slowdown

Why Is Credit Card Spending Growth Showing Signs Of Cooling?

India’s credit card industry crossed nearly ₹2 lakh crore in spending during April 2026, but fresh industry data suggests the sector may be entering a more moderate growth phase after years of rapid post-pandemic expansion.

According to a report by Asit C. Mehta Investment Intermediates, total credit card spending stood at ₹1.97 lakh crore during April, registering a 7.1% year-on-year increase.

However, spending declined 10.1% sequentially compared to March, which typically sees elevated transaction activity due to financial year-end expenses, travel bookings and tax-related payments.

Industry analysts believe the latest numbers indicate that India’s explosive credit card spending boom may now be gradually normalising.

Are Indians Using Credit Cards More Frequently For Smaller Purchases?

Despite slower overall spending growth, transaction activity across the industry remained exceptionally strong.

The report stated that India processed nearly 556 million credit card transactions during April 2026, reflecting a sharp 23.8% year-on-year increase.

However, average transaction values declined significantly by 13.5% annually to ₹3,546.

At the same time, average spending per card dropped 10.7% month-on-month and remained broadly flat year-on-year at ₹16,512.

The divergence between transaction growth and spending growth indicates a major behavioural shift among consumers.

Industry experts believe Indians are increasingly using credit cards for smaller everyday purchases including food delivery, subscriptions, quick commerce and online shopping instead of relying primarily on cards for large discretionary spending.

Which Banks Are Gaining Market Share In Credit Cards?

While HDFC Bank continued to dominate India’s credit card spending market with a 29.5% share, the strongest growth momentum came from other issuers.

SBI Cards emerged as the biggest outperformer with 29% year-on-year growth in spending and the highest market share gains during the month.

The report attributed much of SBI Cards’ growth to increased corporate spending activity.

Meanwhile, smaller banks have also become increasingly aggressive in expanding their credit card businesses.

Federal Bank reported 51% growth in spending alongside a massive 133% increase in transaction volumes, driven largely by rapid card issuance.

IDFC FIRST Bank also continued gaining market share steadily across card issuance, spending and transaction growth metrics.

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Why Are Some Large Private Banks Losing Momentum?

The report also highlighted weakening momentum among some established private sector banks.

ICICI Bank reportedly witnessed a 7% year-on-year decline in card spending, while Axis Bank recorded only 4% growth, significantly below broader industry growth rates.

Collectively, the top four issuers HDFC Bank, SBI Cards, ICICI Bank and Axis Bank lost 77 basis points of spending market share sequentially.

Industry observers believe increasing competition from smaller and digitally aggressive banks is reshaping India’s credit card market dynamics.

Is India’s Credit Card Market Becoming More Mass-Market?

India now has nearly 119 million credit cards in circulation, with banks adding around 0.8 million new cards during April alone.

Annual growth in cards outstanding reached 8.2%, marking the strongest growth seen in the last 14 months.

The data suggests India’s credit card industry is gradually evolving into a more mass-market and transaction-driven ecosystem.

Industry analysts believe the next phase of growth will likely be driven by everyday digital payments, small-ticket spending and broader penetration beyond affluent urban consumers.

As competition intensifies, banks are expected to increasingly focus on rewards, UPI-linked credit products, co-branded cards and customer acquisition strategies to capture market share.