Monthly credit card spends dropped to a seven-month low of `1.67 trillion (`1.67 cr) in February as against spending of `1.84 trillion in January 2025, according to the latest Reserve Bank data.
The month also saw card issuing banks gearing down their aggressive card issuance with the number of issuance rising marginally to 109.31 million in February from 108.87 million in January. In February 2024, the number stood at 100.60 million, which by December 2024 had jumped to 108.6 million. This means that the industry added only 0.44 million cards in the reporting month, as against issuing nearly three times more at 1.10 million. Even in January the net addition was 0.81 million, which nearly halved to 0.44 million in February.
These developments come amid the continuing stress in unsecured loans, leading to rising debt levels of households, which has been rising since the past a few years as salary growth has been lagging inflation for those already employed and those ready for employment were finding jobs a distant reality.
A recent Transunion Cibil report showed that growth in retail credit continued to slow during the December quarter, with a sharp decline in credit uptake among new-to-credit consumers. Consumption-led credit products originated by new to credit consumers dropped 21% on-year in loan originations.
According to the central bank data, credit card spends through points-of-sale transactions for the month added up to Rs 62,124.91 crore, down from Rs 69,429.4 crore in January, while spends on ecommerce payments declined to Rs 1.05 trillion from Rs 1.15 trillion in the previous month.
“While growth in credit card issuances and spending are slowing, existing gross non-performing asset levels and rising credit costs indicate some pressure. This month, macroeconomic conditions, coupled with seasonal variations such as post-festival slowdown, likely contributed to the decline in credit card spending,” Saurabh Bhalerao, an associate director at Care Ratings said, adding this also shows a shift in their spending patterns amid rising household debt.
The month also saw transactions on leading credit card issuers declining with the industry leader HDFC Bank seeing its volume dropping to Rs 46,378.18 crore in February from Rs 50,664.04 crore in January. Similarly, ICICI Bank saw card transactions falling to Rs 30,990.86 crore from Rs 35,681.6 crore, while Axis Bank’s decling to Rs 18,884.27 crore from Rs 20,212.17 crore.
The second largest player SBI Card witnessed its volume falling to Rs 26,175.55 crore from Rs 28,976.68 crore in January.
Meanwhile, the total number of outstanding credit cards system rose marginally to 109.31 million in the reporting month from 108.87 million in January.