MUMBAI: Credit card spending fell 5.9% year-on-year to about Rs 2 lakh crore in Sept 2026, the first annual decline since Feb 2021, as festive purchases shifted to Oct and a high base amplified the fall.Spending had risen 13.3% month-on-month in Sept 2025 after GST rate cuts took effect and online festive sales began in the last week of the month. Spending in Aug and Sept combined was broadly flat, declining 0.4% year-on-year, suggesting the shift in festive sales accounted for much of Sept’s fall. CareEdge expects spending to rise to Rs 2.3-2.4 lakh crore in Oct on account of festive sales.According to an analysis of RBI data by CareEdge Ratings, growth had already slowed to 6.7% year-on-year in July and Aug from 7.9% in Q1FY27. Credit card spending rose 4.9% in H1FY27 to Rs 12.2 lakh crore, with growth slowing to 2.1% in Q2 from 7.9% in Q1, largely because of Sept’s decline.
Spending fell 9.3% year-on-year at public sector banks (PSBs) and 6.2% at private sector banks (PVBs), while foreign banks recorded 9.2% growth and small finance banks 92.4%, albeit on a small base. Large issuers also attributed weaker annual growth to the shift in the festive season from Sept to Oct.The number of outstanding credit cards rose 10.5% year-on-year to 12.5 crore in Sept, the fastest growth since Nov 2024. Banks added 12.6 lakh cards during the month, against about 12 lakh in Aug. In Q2FY27, the largest private bank issued 1.4 million cards, up 19% from Q1, while SBI Card added more than 1.1 million accounts, up 18% from a year earlier.Banks remain keen to expand retail lending, with bankers reporting stronger demand for retail and personal loans and some easing in lending terms. They expect demand to remain strong in Q3FY27, supporting card issuance through the festive quarter.Spending per card fell 14.8% year-on-year to Rs 16,305 in Sept, extending its annual decline to three consecutive months as spending weakened while the card base expanded. The fall was amplified by a 12.2% month-on-month increase in spending per card in Sept 2025. Cardholders made 61 crore transactions during the month, up 23.2% year-on-year, with each card used around 4.9 times against 4.4 times a year earlier. Transactions fell 3.5% month-on-month, while daily volumes were broadly unchanged.The average transaction value fell 23.6% year-on-year to Rs 3,343, although it rose from Rs 3,201 in Aug. The decline was sharper for online payments, at 28%, than for point-of-sale (PoS) transactions, at 13%. The high base from festive purchases made online in Sept 2025 and the growing use of UPI for card payments, which generally involve smaller amounts, explain the decline. SBI Card reported UPI-linked spending of Rs 21,300 crore in Q2FY27, around a fifth of its total spending.