India saw a strong growth in credit card spending in the fiscal year 2024-25 (FY25), with overall spends reaching a record high of Rs 21.16 lakh crore. This is a 15 per cent jump from the Rs 18.32 lakh crore spending recorded in FY24, according to the figures released by the Reserve Bank of India (RBI).
The increase in credit card spending is due to a combination of factors, namely increased demand from consumers, increased consumption through electronic transactions, and greater convenience with the use of credit-backed transactions, especially among technology- and digital-conscious urban consumers.
March 2025 itself saw record credit card spending of Rs 2.02 lakh crore, a sharp increase from Rs 1.64 lakh crore recorded in March 2024.
February 2025 also saw good spending with credit card spends recorded at Rs 1.68 lakh crore. Notably, discretionary spends increase towards the end of the financial year, and the RBI data also points at the same.
Increase in Number of Credit Cards
With an increase in overall expenditure, the number of credit cards in use also showed a sharp increase.
As of March 2025, there were 109.80 million credit cards in use in the country, up from 101.80 million in the previous year. This growth of 8 million cards indicates consistent consumer confidence and a growing number of credit cardholders.
In net issuance of new cards, HDFC Bank topped the market in March 2025 with issuing 220,000 new cards. SBI Cards issued 160,000 cards, followed by Axis Bank with 130,000 cards, and ICICI Bank with 97,799 cards.
Altogether, 570,000 new cards were issued in March 2025, up from 440,000 in February 2025. The figure is, however, still less than the 12-month average of 710,000 cards, indicating some ease in card issuing activity.
Even though expenditures and card circulation increased, it was not the scenario for all banks. Kotak Mahindra Bank, which was recently authorised by RBI to issue credit cards again after a ban was removed in February 2025, had a net loss of 119,000 cards. RBL Bank also lost 35,000 cards after it ended its tie-up with Bajaj Finance.
Card Spends to Stay Positive in FY26
Looking forward to FY26, analysts project card spend can stay positive because of ongoing consumption tailwinds. Growth in new cards, though, will be slow.
This warning comes after regulatory action by the RBI to contain risk in unsecured lending. Since the later part of 2023, RBI started tightening standards to limit the growth in unsecured credit. Even as it has recently relaxed risk weights on non-banking finance companies (NBFCs) and microfinance institution loans, the central bank has still maintained tighter standards for unsecured personal loans.
The action is seen as a balanced approach aimed at promoting financial inclusion while being vigilant about potential risks in the lending space.
Thus, the lenders now prefer sustainable growth and asset quality over aggressive growth, which promises a more cautious credit card growth strategy next year.
