Credit Card Companies Face September Challenges as Spending Declines by 6% to Rs 2L Cr
MUMBAI: Credit card spending in India experienced a significant decline of 5.9% year-on-year, totaling approximately Rs 2 lakh crore in September 2026. This marks the first annual drop since February 2021, attributed to a shift in festive purchases to October and a high comparative base from the previous year. Month-on-month spending had risen by 13.3% in September 2025, following GST rate cuts and the onset of online festive sales.
Spending Trends and Projections
According to CareEdge Ratings, the overall spending in August and September remained relatively flat, with a slight decline of 0.4% year-on-year. The firm anticipates that spending will rebound to between Rs 2.3 lakh crore and Rs 2.4 lakh crore in October due to the festive season. The analysis of Reserve Bank of India (RBI) data indicates that growth slowed to 6.7% year-on-year in July and August, down from 7.9% in the first quarter of FY27.
In the first half of FY27, credit card spending rose by 4.9% to Rs 12.2 lakh crore. However, growth decelerated to 2.1% in the second quarter, primarily due to the decline in September. Public sector banks reported a 9.3% year-on-year drop in spending, while private sector banks saw a 6.2% decline. In contrast, foreign banks recorded a 9.2% increase, and small finance banks experienced a remarkable 92.4% growth, albeit from a smaller base.
Credit Card Issuance and Usage
The number of outstanding credit cards increased by 10.5% year-on-year, reaching 12.5 crore in September, marking the fastest growth since November 2024. Banks issued 12.6 lakh new cards during the month, slightly up from 12 lakh in August. The largest private bank issued 1.4 million cards in Q2FY27, a 19% increase from the previous quarter, while SBI Card added over 1.1 million accounts, up 18% year-on-year.
Banks are actively pursuing retail lending opportunities, with reports of stronger demand for retail and personal loans. Some banks have also eased lending terms, anticipating continued strong demand in Q3FY27, which is expected to support card issuance during the festive quarter.
Spending per card fell by 14.8% year-on-year to Rs 16,305 in September, marking the third consecutive month of decline. Despite the increase in the number of cards, the average transaction value decreased by 23.6% year-on-year to Rs 3,343, although it rose from Rs 3,201 in August. The decline was more pronounced in online payments, which fell by 28%, compared to a 13% drop in point-of-sale transactions. SBI Card reported UPI-linked spending of Rs 21,300 crore in Q2FY27, accounting for about one-fifth of its total spending.
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