Monday, 31 Aug, 2026
Photo courtesy: Pixabay
The credit-card market is broadening and becoming more competitive as credit moves deeper into everyday spending. The winners may be those that turn this wider usage into lasting, profitable customer relationships
Credit card spending has remained above Rs 2 lakh crore for three months running, a level that would have seemed remarkable not long ago. At first glance, it points to an Indian consumer willing to spend more and borrow more. The latest Reserve Bank of India (RBI) data, however, tells a more complicated story. Spending is rising, but so are the number of cards and transactions. The more striking change is that people are using their cards more often while spending less on each transaction.
July’s credit card spending stood at Rs 2.08 trillion, 7.4 per cent higher than a year earlier and up 3.4 per cent from Rs 2.01 trillion in June. The all-time monthly high of Rs 2.18 trillion was recorded in March. The broader trend is equally telling: average monthly spending has climbed from Rs 1.93 trillion in 2025 to around Rs 2 trillion in the first seven months of 2026. With the festival season ahead, the Rs 2-trillion mark may increasingly look less like a milestone and more like the new monthly norm.
Banks, meanwhile, are continuing to issue cards at a brisk pace. They added 1.26 million credit cards in July, 11.5 per cent more than the 1.13 million added in June. Over the past year, issuers added 11 million cards, taking the total outstanding to 122.86 million, up 9.9 per cent from a year earlier. The number stood at 121.6 million in June and 111.62 million in July 2025.
But card additions are running ahead of spending growth. The number of transactions rose 24.5 per cent from a year earlier to 605.3 million, more than three times the 7.4 per cent growth in spending. As a result, the average transaction value fell by nearly 14 per cent to about Rs 3,440 from Rs 3,987.
That is the clearest sign of how the market is changing. Credit cards are no longer being used only for airline tickets, expensive gadgets or other big purchases. They are increasingly being used for ordinary spending. The market is reaching more people and entering more parts of everyday commerce, but the expansion is also bringing down the average value of each swipe.
That has implications for card issuers. A rapidly rising card base can give an impression of a booming market, but more cards do not automatically mean proportionately higher spending or profits. Banks are increasingly competing for customers outside the traditional premium segment. These customers may use their cards more frequently, but for smaller purchases.
The shift is also changing the balance of power among banks.
Private banks remain far ahead in absolute terms. They added 3.9 million cards during January-July, taking their total to 86.91 million. Their customers spent Rs 1.50 lakh crore in July, or 72.1 per cent of the industry’s total spending. Yet their expenditure rose only 2.8 per cent from a year earlier, and their market share fell by about 321 basis points.
Public-sector banks are gaining ground. They added 1.55 million cards in the first seven months of the year, taking their card base to 29.40 million. Their spending rose 22 per cent from a year earlier to Rs 46,159 crore, pushing their share of industry expenditure up by about 265 basis points to 22.2 per cent.
SBI Card has been a major driver of that growth, with spending rising 21.6 per cent to Rs 39,591.76 crore. HDFC Bank, the country’s largest card issuer, reported an 11.93 per cent rise in spending to Rs 60,217.54 crore. The picture was less encouraging for some other private lenders. ICICI Bank’s card spending fell 5.9 per cent to Rs 34,025.27 crore, while Axis Bank recorded a 4.6 per cent increase to Rs 23,824.7 crore.
The competition for new customers remains intense. HDFC Bank led additions in July with 230,067 cards, up from 163,511 in June. SBI Card added 183,076 and ICICI Bank 170,156. Federal Bank added 108,492 cards, followed by IDFC First Bank with 82,723, Axis Bank with 70,091, Kotak Mahindra Bank with 64,617 and RBL Bank with 26,915.
Over the past year, HDFC Bank added 2.1 million cards, the most among issuers. ICICI Bank followed with 1.64 million and SBI Card with 1.50 million. Federal Bank added 1.20 million cards, ahead of Axis Bank's 1.08 million, while IDFC First Bank added 1.03 million. IndusInd Bank was the notable exception among large issuers, cutting 9,397 cards in July after reducing its portfolio by 10,890 in June.
Foreign banks are moving in the other direction. Their card base fell by 0.12 million during January-July to 4.24 million. Yet spending on their cards rose to Rs 9,000 crore. The contrast suggests that foreign lenders are retaining relatively high-spending customers while steadily losing ground in the larger battle for numbers and reach.
The July figures therefore point to a credit-card market entering a new phase. It is still expanding rapidly, but the nature of that growth is changing. Cards are reaching more consumers and being used more often, increasingly for smaller and routine purchases.
For consumers, that reflects the growing acceptance of cards as an everyday payment tool. For banks, the opportunity is accompanied by a harder question: whether rapid expansion can translate into sustainable and profitable lending. A larger customer base is valuable only if spending remains healthy and repayment discipline holds.
The Rs 2-lakh crore monthly spending mark may well become the new benchmark, particularly as the festival season begins. But the more important development lies beneath that headline. India’s credit-card market is becoming broader, more competitive and more deeply woven into everyday spending. The next winners may not simply be the banks that issue the most cards, but those that can build profitable relationships with customers who are beginning to use credit in very different ways.
