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According to the latest industry data, total card spends dropped 9 per cent month-on-month (MoM) to Rs 1,67,200 crore, the lowest level in seven months.
February typically witnesses softer discretionary spending as individuals shift focus to tax planning, according to ACMIIL. (Representative/News18 File)
Credit card spending in India saw a seven-month decline in February 2025, in line with typical seasonal trends, according to a report by brokerage firm Asit C Mehta Investment Intermediates Ltd (ACMIIL) citing the latest data from RBI. According to the latest industry data, total card spends dropped 9 per cent month-on-month (MoM) to Rs 1,67,200 crore, the lowest level in seven months.
However, on a year-on-year (YoY) basis, spending was up 12 per cent, though this marked a slower pace compared to previous months, according to ACMIIL.
Transaction Volumes Reflect Cautious Consumer Sentiment
The decline was mirrored in transaction volumes, which fell 8 per cent MoM to 396 million. Despite this, volumes still grew 27 per cent YoY compared to February 2024. Notably, this is the slowest YoY growth in the past 13 months. The average spend per transaction also declined, slipping from Rs 4,282 in January to Rs 4,219 in February—an indication of increased consumer caution.
Tax Planning and End of Festive Season Weigh on Spending
February typically witnesses softer discretionary spending as individuals shift focus to tax planning. With major festive spending concluding in the preceding months, consumer expenditure generally remains muted until the Holi period, according to the ACMIIL report.
Credit Card Base Grows Marginally; YoY Growth Slows
The total number of outstanding credit cards increased marginally by 0.4 per cent MoM to reach 109 million. However, YoY growth moderated to 9 per cent — the slowest pace recorded since June 2021 — pointing to a broader cooling-off in new card issuances after years of aggressive growth.
Top Players Consolidate Market Share
Leading issuers continued to consolidate their positions. HDFC Bank and SBI each gained 10 basis points (bps) in card count market share, reaching 21.6 per cent and 18.9 per cent, respectively. ICICI Bank remained steady at 16.6 per cent, while Axis Bank saw a minor decline of 10 bps to 13.5 per cent.
Among mid-sized players, IDFC First Bank reported the strongest performance, adding 80 bps over the year to reach a 3.2 per cent market share. In contrast, RBL Bank and Kotak Mahindra Bank saw slight dips in their shares.
Industry Braces for Shifts Post-RBI Action
The recent lifting of restrictions by the Reserve Bank of India (RBI) on Kotak Mahindra Bank’s credit card business is expected to shake up the market in the coming months. While spending is projected to recover, February’s data underscores the continuing influence of seasonal trends and cautious industry sentiment.
‘Growth Momentum Likely to Stay Subdued’
Akshay Tiwari, assistant vice-president (AVP) and equity research analyst (BFSI) at Asit C Mehta Investment Interrmediates Ltd, said, “he subdued performance observed in February can primarily be attributed to tax-related planning activities and the lack of festive occasions during the period. This, coupled with increased caution within the industry regarding unsecured lending, led to consumer expenditure declining to a seven-month low.”
While the overall growth rate has slowed, competitive dynamics among major players have intensified, with HDFC Bank and SBI each achieving a 10 bps increase in market share. Meanwhile, card issuance rates have plateaued, recording a marginal growth of 0.4 per cent MoM, which translates to approximately 440,000 new cards issued during the month, he added.
“We expect this tepid trajectory to continue in the near term before stabilising,” Tiwari said.
