India’s credit card spending soared to a record in September 2025, marking a 23% year-on-year rise and a 13% sequential increase—the highest level in five years—according to CareEdge. The surge was fuelled by bank-led festive promotions, increased consumer appetite for discretionary spending, and the government’s reduction in GST rates, which collectively boosted purchases of high-value goods and services.

Although the annual growth rate was slightly lower than the 24% recorded in September 2024, the overall momentum remained strong, reflecting robust consumer confidence. The expansion was supported by higher card issuance and wider digital adoption, signalling a maturing payments ecosystem even as financial institutions tightened their focus on risk management in unsecured lending.

Private banks dominate, but public lenders gain ground

Private sector banks (PVBs) continued to dominate the market with a 74.2% share of total credit card spending in September 2025. However, their dominance showed a marginal decline of 130 basis points from a year earlier, largely due to the expansion efforts of public sector banks (PSBs). PSBs increased their market share to 21.2%, up from 18.4% last year, reflecting their growing outreach in tier-2 and tier-3 cities and stronger distribution networks.

The PSB market remains concentrated among a few large state-run banks, while smaller PSBs contribute minimally, accounting for only about 0.5% of overall spending. Foreign and small finance banks collectively held a 4.6% share, underscoring their relatively limited presence in the credit card segment.

The total number of outstanding credit cards reached 113mn in September 2025, up from 106mn a year earlier, reflecting a 7% year-on-year rise. The sequential monthly increase was 1%, supported by consistent customer acquisition, co-branded partnerships, and the expansion of digital banking services. However, this growth was slower than the 14% increase seen in 2024, as banks adopted a more selective approach in targeting higher-quality customers amid concerns about rising delinquencies in unsecured loans.

Per-card spending climbed to INR19,144 ($216) in September, a 12.2% increase from the previous month and 15% higher year-on-year. This was driven by the festive season, increased e-commerce participation, and the popularity of bank-led cashback and reward schemes. Large private banks reported the highest per-card spends, averaging INR20,011—a 3% increase from last year. Public banks, meanwhile, saw a sharper 30% jump to INR16,927 per card, supported by improved digital interfaces and competitive rewards programmes.

Festive season and digital commerce drive growth

The surge in September coincided with the start of India’s festive shopping season, a period that traditionally witnesses heightened retail and online sales. A combination of lower GST rates and attractive offers on electronics, fashion, and travel spending provided additional impetus. The trend also reflects India’s rapidly evolving consumer landscape, where digital payments and credit-based purchases are becoming mainstream across income groups.

According to CareEdge, banks have played a crucial role in sustaining this momentum through strategic marketing, easy EMI conversions, and enhanced credit limits for select customer segments. The continued growth of online marketplaces and the penetration of contactless payment options further amplified card usage across categories.

As a proportion of total retail loans, credit card balances declined to 4.5% in September 2025, down from 4.9% a year earlier. This indicates a relative slowdown in outstanding balances even as retail lending in other segments—such as housing, auto, and personal loans—expanded. Analysts attribute this to increased repayment discipline, improved credit monitoring by banks, and the wider use of structured payment products.

Shift in consumer behaviour and spending mix

A key trend highlighted in CareEdge’s analysis is the shift towards value-driven and digital transactions. Consumers are increasingly using credit cards not only for traditional retail purchases but also for services such as travel, insurance, healthcare, and utility payments. High-ticket purchases during sale events and travel bookings ahead of the festive holidays contributed significantly to the September spike.

Banks have also deepened their partnerships with e-commerce platforms, fuel retailers, and entertainment providers to offer co-branded benefits and targeted rewards. This strategy has led to higher utilisation rates and customer retention, especially among urban, high-income users.

Public banks narrow the gap 

Public sector banks, traditionally slow to adopt digital innovations, have made notable progress in modernising their credit card portfolios. Many have launched mobile-first offerings, enhanced reward redemption options, and improved customer engagement through analytics-driven insights. These efforts have helped them capture a larger share of new credit card issuances and spending volumes, particularly in semi-urban markets.

The outlook for credit card spending remains optimistic as India heads into the peak festive quarter. However, CareEdge cautions that the moderation in year-on-year growth and the recent decline in outstanding balances suggest a maturing phase for the segment. Banks are likely to focus on maintaining asset quality while expanding their card base selectively.

Credit card spending is expected to stay strong through the end of 2025, supported by continued consumer confidence, steady economic growth, and deeper financial digitisation. The interplay between rising discretionary income and prudent credit management is likely to shape the next stage of expansion in India’s retail credit landscape.

In summary, India’s record credit card spending in September 2025 underscores the resilience of consumer demand and the success of policy and industry initiatives in promoting cashless payments. As festive momentum continues and banks refine their product offerings, the country’s credit card market is poised to remain a vital pillar of its retail economy in the years ahead.