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This robust performance in credit card expenditure underscores a broader trend of resilient consumer demand in India, even as economic indicators point towards sustained growth. The shift in payment preferences, with credit cards capturing a larger share of high-value transactions and online purchases, signals a maturing financial ecosystem. Banks are adapting by focusing on strategic customer acquisition and value-driven engagement.
The Core Catalyst: Spending Momentum
Credit card expenditures have climbed 13.57% year-on-year to Rs 17.65 trillion in the April-December period of fiscal year 2026, a substantial increase from Rs 15.54 trillion in the prior year. This upward trajectory was notably boosted in December 2025, which saw spending rise 9.04% year-on-year to Rs 2.05 trillion, marking the fourth instance monthly spending surpassed the Rs 2 trillion threshold in 2025. The total number of active credit cards in the system expanded by 7.14% year-on-year to 115.78 million by the end of December 2025 [cite: Original News].
Analytical Deep Dive: Sectoral Shifts and Issuer Performance
The credit card segment's strength is attributed to a confluence of factors, including strategic adjustments by banks to focus on high-value, low-default customers, a pivot from the issuance recalibrations seen in the previous year. Saurabh Bhalerao from CareEdge Ratings noted that GST relaxation post-October and ongoing festive spending significantly contributed to this improved performance [cite: Original News]. Concurrently, point-of-sale (PoS) transactions grew 12.01% year-on-year to Rs 6.63 trillion, while e-commerce spending surged 14.38% to Rs 11.03 trillion in the April-December FY26 period [cite: Original News].
Major credit card issuers have reported commensurate growth. HDFC Bank's credit card spends reached Rs 57,235.50 crore in December, an increase from the previous year. SBI Cards recorded a significant 41.4% year-on-year rise in spends, reaching Rs 39,892.85 crore. ICICI Bank saw a 5.3% increase to Rs 36,871.46 crore, and Axis Bank reported a 7.13% rise to Rs 23,181.72 crore [cite: Original News].
This growth occurs as credit card transactions have doubled in volume and nearly tripled in value between 2019 and 2024, while debit card transactions have declined in both volume and value during the same period. Credit cards are increasingly being used for online purchases and credit access, with private sector banks dominating the outstanding credit card market share. The rise of UPI-linked credit cards and RuPay's increasing share also highlights evolving consumer behaviour, integrating credit into everyday digital transactions.
The Indian economy is projected to grow robustly, with forecasts suggesting expansion between 7.5% and 7.8% for fiscal year 2025-26. This economic optimism is mirrored in consumer sentiment, with a significant portion of households expecting higher spending in the coming months. The financial sector, including credit card issuers, is benefiting from this demand, although regulatory shifts, such as changes in risk weighting for unsecured loans, are prompting a more calibrated approach from lenders.
Future Outlook: Steady Momentum
Analysts at IDBI Capital anticipate that spending momentum will remain steady, supported by residual festive demand and stable consumption trends. While year-on-year growth may moderate, improving volumes and consistent card additions indicate persistent underlying demand. Banks are expected to prioritize calibrated growth, fee income generation, and card activation over aggressive customer acquisition, focusing on high-value, low-default customer segments [cite: Original News]. HDFC Bank leads in card issuances with 25.79 million cards, followed by SBI Card (21.81 million), ICICI Bank (18.65 million), and Axis Bank (15.65 million) as of December 2025 [cite: Original News]. The market cap for these leading banks ranges from approximately ₹3.91 trillion for Axis Bank to over ₹14.25 trillion for HDFC Bank, with P/E ratios varying between 15x and 38x, reflecting diverse valuations.