Credit Card Spending Rises 14% YoY in January 2025

Total credit card spending in January 2025 stood at Rs 1,841 billion, reflecting a 2% decline from December 2024 but registering a strong 14% increase compared to January 2024, according to data analyzed by Asit C. Mehta Investment Intermediates. The monthly dip was largely due to seasonal factors, as December saw higher spending due to festive and year-end purchases.

Transaction Volume Growth Despite Slowdown

The total number of credit card transactions for January 2025 was 430 million, showing a 31% year-on-year (YoY) increase, despite a 1% month-on-month (MoM) decline from December. Analysts attribute this slowdown to increased caution among lenders due to rising delinquencies.

Credit Card Circulation and Spending Trends

• The total number of credit cards in circulation fell by 1.2 million in January 2025, bringing the total to 109 million.
• Average spending per card declined slightly by 1% MoM to Rs 16,911, but saw a 1% YoY increase.
• The average spend per transaction was Rs 4,282, showing a 1% MoM decline and a 15% YoY decrease, highlighting shifts in consumer spending habits amid changing economic conditions.

Major Banks Strengthen Market Share

Leading banks continued to expand their credit card market presence:

• HDFC Bank increased its market share from 20.2% to 21.5% in the past year, driven by aggressive customer acquisition strategies.
• SBI Cards recovered from a temporary decline, reaching 18.8% market share after adding 240,000 new cards in January.
• ICICI Bank also saw growth, with its market share rising from 16.3% to 16.6%.

Among mid-sized banks, Yes Bank’s market share remained unchanged at 2.2% since September 2024, while IDFC First Bank expanded its share from 2.4% to 3.1% over the past year.

Kotak Mahindra Bank Re-enters Credit Card Market

A significant development in February 2025 was the Reserve Bank of India (RBI) lifting the 10-month embargo on Kotak Mahindra Bank’s credit card issuance. With Kotak’s current market share at 4.6%, this decision is expected to reshape competition in the sector in the coming months.

Outlook: Market Growth Despite Short-Term Fluctuations

Despite fluctuations in spending and transaction volume, the credit card industry continues to show long-term growth. However, evolving consumer spending habits and cautious lending policies will play a crucial role in shaping the market’s future.

Industry experts remain optimistic about growth, though mid-sized banks appear to be more cautious in card issuance.

“Although the credit card data shows a slowdown in new card issuance and spending at the industry level, leading banks like HDFC and SBI have continued to gain market share. Meanwhile, mid-sized banks have taken a more cautious approach to credit card disbursements,” said Mr. Akshay Tiwari, AVP – Equity Research Analyst, BFSI, Asit C. Mehta Investment Intermediates Ltd.