Credit card usage is slowly expanding beyond metro cities in India due to rising incomes, better digital awareness, and improved payment infrastructure, according to a report by SBI Card.
Credit card transactions in the country increased over 2.6 times between years 2021 and 2025, with private sector banks further increasing their market share and consolidating their dominance in the segment, as per the RBI report.
Credit card transaction volumes increased to 570 crore in calendar year 2025, from 216 crore in 2021, while transaction value rose to Rs 23.2 lakh crore from Rs 8.9 lakh crore during the same period, translating into an annual growth rate of around 27 per cent, as per RBI’s Payment System Report December 2025.
Debit card transaction volumes fell to 133.6 crore in 2025, from 408.7 crore in 2021, while transaction value dropped to Rs 4.5 lakh crore during the period, from Rs 7.4 lakh crore.
Private sector banks expanded their share in outstanding credit cards to 71.1 per cent in December 2025 from 67.7 per cent in December 2021. Public sector banks marginally improved their share to 23.9 per cent from 23.5 per cent, while foreign banks saw their share decline sharply to 3.8 per cent from 9.3 per cent over the same period. Small finance banks had issued 14 lakh cards by December 2025.
According to SBI Card data, around 77 per cent of UPI-active credit card users and nearly 81 per cent of UPI credit card spending come from Tier-II and Tier-III cities. This shows strong growth in digital credit usage in smaller cities and highlights the role of credit cards in improving financial inclusion.
SBI Card, India’s second-largest credit card issuer and the largest pure-play credit card company, said that rising incomes, increasing urbanisation, and the growing aspirations of the middle class have changed spending habits over the past decade.
Around 118.6 million credit cards are currently in circulation in India, and credit card spending crossed Rs 23.62 trillion during FY26. The company said the market is now shifting from expansion to higher usage.
According to SBI Card’s FY26 data, retail spending reached a record level of more than Rs 3.54 trillion, showing a 15 per cent year-on-year growth. Online spending contributed nearly 62.5 per cent of total retail spending, showing the growing preference for digital payments across essential and lifestyle categories.
According to SBI Card’s Q4 FY26 data, spending through UPI-linked credit cards grew by more than 10 per cent quarter-on-quarter. Categories such as grocery stores, utilities, fuel, clothing, restaurants, and departmental stores led this growth, showing growing customer confidence in digital payments.
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