Credit card spending surges 23% in September to Rs 2.17 lakh crore

Credit card spending in India climbed sharply by 23 per cent year-on-year to Rs 2.17 lakh crore in September, driven by festive season purchases, attractive offers and higher card issuances, according to data compiled by CareEdge Ratings. The rise reflected buoyant consumer sentiment, aided by GST rate cuts on select items and an overall pick-up in urban consumption.

On a month-on-month basis, spending increased 13 per cent, highlighting continued enthusiasm among consumers ahead of the festive season. Though the pace of expansion was slightly lower than the 24 per cent growth seen last year, the data points to a strong recovery in discretionary expenditure and broader digital payment adoption.

Private banks dominate, but public lenders catch up

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The total number of active credit cards rose to 11.3 crore in September 2025, up 7 per cent from 10.6 crore a year earlier. Month-on-month growth stood at 1 per cent, indicating consistent expansion in card usage.

Private sector banks continued to lead the market through targeted acquisitions, co-branded cards and improved digital services. However, the overall growth rate was more moderate compared to the 14 per cent expansion recorded in the previous year. The slower pace reflects a cautious approach by lenders who are focusing on higher-quality borrowers in light of rising defaults within unsecured loans.

CareEdge data also showed a shift in market share. Private sector banks’ share fell by 130 basis points to 74.2 per cent from 75.5 per cent a year ago. In contrast, Public Sector Banks (PSBs) strengthened their position, supported by wider reach in smaller cities, government-led initiatives, and expanded digital networks. Larger PSBs accounted for most of this growth, while smaller ones contributed a modest 0.5 per cent.

Per-card spending touches record high

Average spending per card reached Rs 19,144 in September, rising 15 per cent year-on-year and 12.2 per cent month-on-month. The increase was driven by festive shopping, e-commerce sales and improved loyalty programmes introduced by banks.

Customers of private banks spent an average of Rs 20,011 per card, up 3 per cent from a year earlier. Public sector bank customers, meanwhile, recorded a stronger 30 per cent jump to Rs 16,927, reflecting growing comfort with digital transactions and competitive reward schemes.

Credit card balances remain stable

Outstanding credit card balances stood at Rs 2.82 lakh crore in September, slightly below Rs 2.89 lakh crore in August but higher than Rs 2.72 lakh crore in the same month last year. The share of credit card dues in total retail loans fell by 40 basis points to 4.5 per cent, indicating steady repayments despite higher spending.

This moderation suggests borrowers are managing their credit well, even as festive expenses peak. The data also highlights a healthy balance between consumption and repayment, supported by improving financial discipline among cardholders.

Digital adoption and festive season to drive momentum

Credit card transactions are expected to remain strong through the rest of the year, supported by travel spending, holiday shopping and continued digital penetration. Financial institutions are likely to maintain a selective approach in issuing new cards, focusing on customers with stable repayment histories.