Credit card spending moderates while banks keep adding users
Credit card spends fell nearly 11% month-on-month to ₹1.78 lakh crore in February 2026 from ₹1.99 lakh crore in January, Reserve Bank of India data showed, partly due to the shorter month.
On a year-on-year basis, however, spending rose nearly 6% from ₹1.68 lakh crore in February 2025, slowing from 8.1% growth a year earlier, indicating a gradual normalisation in consumer spending.
"Industry growth continues to trend lower in the mid-to-high single digit range, with year-on-year spending growth moderating to 6% from the 8% levels seen in recent months," said Sweta Padhi, analyst at IDBI Capital. "The divergence between improving card additions and weaker transaction volumes suggests a gradual shift towards calibrated growth, with issuers focusing on portfolio expansion while maintaining tighter control on risk and usage."
Padhi added that recent industry developments, including reward rationalisation and increased adoption of spend-linked benefits, point to a continued focus on profitability and cost optimisation.
Even as spending moderated, banks continued to expand their cardholder base. A net 1.05 million credit cards were added in February, a six-month high and a 21% increase over 868,000 cards added in January, taking the total cards in force to 117.7 million.
Axis Bank led card additions during the month, adding 155,000 net new cards to take its total to 15.8 million, nearly double the roughly 90,000 cards added in January. HDFC Bank added 151,000 cards, down from 310,000 in the previous month, taking its total to 26.2 million. ICICI Bank added 140,000 cards compared with 122,000 in January, taking its total to 18.9 million.
Together, the top three private sector lenders added nearly 447,000 cards in a month, underscoring intense competition among large issuers even as spending momentum eased.
Among mid-sized lenders, Federal Bank added 95,243 cards, followed by IDFC First Bank with 77,711. SBI Cards, the second-largest credit card issuer, added fewer than 70,000 cards.
"Issuance momentum continued to be led by private sector banks, supported by stronger distribution capabilities and co-branded partnerships with e-commerce and fintech platforms," said Saurabh Bhalerao, associate director at CARE Ratings.
"Spending growth is expected to remain moderate, supported by services consumption, expansion of digital commerce and increasing card penetration in semi-urban and rural markets. However, growth could be tempered by a cautious credit environment and tighter underwriting standards across issuers," he said.
Transaction volumes fell 8.6% sequentially after a flat trend in January, though they grew 24% year-on-year, indicating some moderation in usage intensity despite strong card additions.
On a year-on-year basis, however, spending rose nearly 6% from ₹1.68 lakh crore in February 2025, slowing from 8.1% growth a year earlier, indicating a gradual normalisation in consumer spending.
"Industry growth continues to trend lower in the mid-to-high single digit range, with year-on-year spending growth moderating to 6% from the 8% levels seen in recent months," said Sweta Padhi, analyst at IDBI Capital. "The divergence between improving card additions and weaker transaction volumes suggests a gradual shift towards calibrated growth, with issuers focusing on portfolio expansion while maintaining tighter control on risk and usage."
Padhi added that recent industry developments, including reward rationalisation and increased adoption of spend-linked benefits, point to a continued focus on profitability and cost optimisation.
Even as spending moderated, banks continued to expand their cardholder base. A net 1.05 million credit cards were added in February, a six-month high and a 21% increase over 868,000 cards added in January, taking the total cards in force to 117.7 million.
Axis Bank led card additions during the month, adding 155,000 net new cards to take its total to 15.8 million, nearly double the roughly 90,000 cards added in January. HDFC Bank added 151,000 cards, down from 310,000 in the previous month, taking its total to 26.2 million. ICICI Bank added 140,000 cards compared with 122,000 in January, taking its total to 18.9 million.
Together, the top three private sector lenders added nearly 447,000 cards in a month, underscoring intense competition among large issuers even as spending momentum eased.
Among mid-sized lenders, Federal Bank added 95,243 cards, followed by IDFC First Bank with 77,711. SBI Cards, the second-largest credit card issuer, added fewer than 70,000 cards.
"Issuance momentum continued to be led by private sector banks, supported by stronger distribution capabilities and co-branded partnerships with e-commerce and fintech platforms," said Saurabh Bhalerao, associate director at CARE Ratings.
"Spending growth is expected to remain moderate, supported by services consumption, expansion of digital commerce and increasing card penetration in semi-urban and rural markets. However, growth could be tempered by a cautious credit environment and tighter underwriting standards across issuers," he said.
Transaction volumes fell 8.6% sequentially after a flat trend in January, though they grew 24% year-on-year, indicating some moderation in usage intensity despite strong card additions.
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