Credit card spending in India declined 5.9% year-on-year to ₹2.04 lakh crore in September 2026, according to Reserve Bank of India (RBI) data cited in the supplied report. The fall marks the first annual contraction since February 2021, even as the number of credit cards and transaction volumes continued to increase.
The figures point to a shift in consumer spending patterns, with weaker online purchases and a possible movement of festive shopping into October contributing to the monthly outcome.
Online Spending Weakens as Point-of-Sale Purchases Grow
Online credit card spending fell 12.5% year-on-year to ₹1.26 lakh crore in September. In contrast, spending through point-of-sale (POS) terminals rose 7.2% to ₹77,751 crore.
Online transactions accounted for 61.70% of total credit card spending, down 469 basis points from the corresponding period a year earlier.
CareEdge Ratings attributed part of the decline to a high comparison base. September 2025 had benefited from tax rate reductions and the start of online festive sales, while some festive purchases in 2026 may have shifted to October.
This difference in timing makes it important to interpret September's decline alongside spending data for the following months. A single month's figures do not necessarily establish a sustained change in household consumption.
Credit Card Numbers Rise Despite Lower Spending
The decline in total expenditure came alongside continued growth in credit card issuance. Outstanding credit cards increased 10.4% year-on-year to 12.53 crore, the fastest growth since November 2024, according to the report.
Banks added a net 12.62 lakh cards in September, compared with 12.02 lakh in August.
Transaction volumes also increased 23.2% to 61 crore. However, the average transaction value fell 23.6% to ₹3,343, while average spending per card declined 14.8% to ₹16,305.
Together, these figures indicate that more transactions were taking place even as the average amount spent per transaction decreased. The number of cards in circulation, therefore, did not translate into higher aggregate spending during the month.
CareEdge identified several possible contributing factors, including fewer high-value festive purchases, increased credit card use through the Unified Payments Interface (UPI) and weaker air travel spending.
For the first half of FY27, credit card expenditure still increased 4.9% to ₹12.18 lakh crore, although the report noted that quarterly growth had slowed.
Private Banks Increase Their Share of Credit Card Spending
Private sector banks raised their share of total credit card spending to 73.78% in September, while public sector banks accounted for 20.41%. Despite the difference in market share, spending declined year-on-year across both groups: 6.2% for private lenders and 9.3% for public sector banks.
HDFC Bank was a notable exception to the broader slowdown. Its share of credit card spending increased by 165 basis points to 31.94%, supported by annual spending growth of 7.7%.
According to InCred Equities, HDFC Bank gained market share for the second consecutive month. The report said ICICI Bank, SBI Cards, Axis Bank, RBL Bank and Kotak Mahindra Bank lost share over the period.
Excluding State Bank of India, public sector banks recorded spending growth of 26.3%, which the report linked to expansion into smaller towns and wider adoption of RuPay cards.
These differences underline that the slowdown was not uniform across issuers. Banks' performance varied depending on customer segments, product offerings and their ability to attract spending.
What Is the Outlook for Festive Spending?
Credit card issuers are navigating several pressures, including tighter card issuance norms, competition from quick-lending applications and concerns about asset quality. The report also notes that lenders are focusing on premium customers and higher-value products while reviewing rewards programmes and card benefits.
The outlook for October and November will be important in determining whether September's decline was largely a result of festive spending shifting between months.
According to the forecast cited in the report, Bhalerao expects October credit card spending to reach ₹2.28 lakh crore to ₹2.38 lakh crore as festive sales gather momentum, with November also expected to remain strong during Diwali. This is a forecast, not a confirmed outcome.
What the September Figures Mean for Consumers and Banks
The latest figures show why transaction volume, card issuance and total spending need to be considered separately. More cards and transactions can coexist with lower overall expenditure when the average transaction amount falls.
For banks, the data may reinforce the importance of monitoring customer spending patterns, credit exposure and the profitability of card portfolios. Financial planning and appropriate business advisory services can help organisations assess changing market conditions and evaluate operational priorities.
The next few months of RBI data should provide a clearer picture of whether festive demand rebounds as expected or whether the September decline signals a more persistent moderation in credit card spending.