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Mumbai: Credit card spending experienced a moderation in January following the heightened activity seen during the December festival season, according to central bank data. Despite this slowdown, expenditure through credit cards increased by over 8% compared to a strong January 2025, signaling a return to more normalized growth rates that had previously soared into the teens.
Overview of Credit Card Spending in January
– In January, Indian consumers spent Rs 1.99 lakh crore through their credit lines, down from Rs 2.05 lakh crore in December.
– This figure, however, shows an increase from Rs 1.82 lakh crore spent in January of the previous year.
Sweta Padhi, an analyst at IDBI Capital, noted, “The moderation in credit card spending growth in January represents a natural cooldown after the festive surge. Industry-wide growth has decreased from mid-teen levels observed last year, settling back into the 8% range, without any significant revival yet.”
Active Credit Card Trends
– The number of active credit cards surged to 116.6 million.
– New card additions slowed considerably to 868,000, compared to over 900,000 in December 2025.
– This deceleration reflects stricter underwriting standards and a more disciplined regulatory approach.
Large private banks remained the pivotal players in the landscape of incremental card additions.
Key Player Contributions
– HDFC Bank: 310,000 new cards
– ICICI Bank: 122,000 new cards
– SBI Cards: 92,226 new cards
– Axis Bank: 87,912 new cards
– Kotak Mahindra Bank: 35,968 new cards
In contrast, IndusInd Bank experienced a reduction in its total card base, declining by more than 100,000 cards.
Rajiv Anand, MD & CEO of IndusInd Bank, expressed caution: “Our credit card business is currently stalled as we navigate elevated system-wide risks. We are in the process of hiring a new head of credit cards to reassess our portfolio for better alignment.”
Transaction Volumes and Market Dynamics
Transaction volumes appeared stable sequentially, yet they showcased impressive 25% year-on-year growth, indicating a resilient trend in card usage despite the overall spending moderation.
Private sector banks continue to claim the lion’s share of the market, showing a reluctance to engage in high-risk ventures. Public-sector banks (PSBs), on the other hand, are gradually increasing their share in credit card spending, driven by higher usage rates among existing cardholders and robust festive demand.
– The share of PSBs in credit card spending rose 4.5 percentage points year-on-year to 22.2% in December 2025, as reported by the RBI.
Conclusion
As credit card spending continues to moderate after the festive highs of December, the industry seems to be recalibrating for sustainable growth. Increased regulatory scrutiny and a focus on portfolio quality are shaping the future landscape of credit card transactions in India. While growth remains steady, the emphasis is clearly shifting towards maintaining a balance between risk and expansion.