Credit card spending in India moderated in October, indicating a clear normalisation after the GST– and festival-led surge seen a month earlier, even as banks continued to expand card issuance and deepen credit usage among existing customers. According to the CareEdge report, aggregate credit card spending rose 6% year-on-year in October to Rs 2.15 lakh crore but slipped 1.1% sequentially. The growth rate was also sharply lower than the 13% expansion recorded during the same period last year and 24% growth in September.
Increase in total outstanding cards
Despite the slowdown, the credit card market expanded steadily. Total number of outstanding cards increased to 114 million in October from 107 million a year ago, reflecting sustained penetration across urban and semi-urban markets. However, the pace of issuance eased as banks tightened underwriting standards amid higher delinquencies in unsecured lending and focus on customer quality over volumes.
Private sector banks (PVBs) dominated the credit card spending with a 73.6% market share, though this was down 190 basis points on year. The erosion was largely driven by smaller and mid-sized private banks, while large private lenders broadly held on to their positions. Analysts noted that PVBs have consciously moderated issuance in low-margin, high-volume segments, prioritising premium cards and fee-based income streams instead.
PSBs gain ground
Public sector banks (PSBs) gained ground, with their spending share at 21.4% in October from 18.5% a year ago. The gains were concentrated among a few large PSBs, supported by aggressive onboarding in mass and co-branded card segments, a wider reach in tier-2 and tier-3 cities, and improved digital and rewards offerings.
Overall, per-card spending stood at Rs 18,824 in October, marginally lower on a sequential and on year basis. PVBs saw per-card spending decline 12% on-year, while PSBs recorded a 14% rise in per-card spending due to enhanced digital and rewards offerings by large PSBs.
Outstanding credit card balances reached Rs 3.03 lakh crore in October, up from Rs 2.81 lakh crore a year earlier. However, growth in outstanding balances slowed to 7.7% year-on-year, down sharply from nearly 17% last year, amid RBI’s tighter norms on unsecured lending and faster growth in lower-risk retail loans such as housing. CareEdge expects spending momentum to pick up modestly towards year-end, with mid-single-digit growth sustained by online transactions and services-led consumption in an increasingly mature market.