Credit card spending falls 5.9% in September, first decline since 2021

Spending drops 5.9% in Sep to Rs 2.04 trillion against a high year-ago base

Credit card spending fell 5.9 per cent year-on-year (Y-o-Y) to ₹2.04 trillion in September this year, owing to a high base in the previous year. This was the first Y-o-Y decline since February 2021. In September 2025, credit card spending had risen following the goods and services tax (GST) rate cuts and an earlier start to festival spending, according to analysts.

 

This year, festival sales are expected to begin in October, and spending is likely to pick up during the month, analysts said.

 

In September this year, online card spending fell 12.5 per cent Y-o-Y to ₹1.26 trillion from ₹1.44 trillion. However, point-of-sale spending grew 7.18 per cent Y-o-Y to ₹77,751.47 crore from ₹72,543.89 crore.

  

The GST Council announced rate rationalisation across sectors in late September 2025, coinciding with the festival season and driving monthly credit card spending to ₹2.17 trillion, one of the highest levels on record. Spending rose nearly 23 per cent from September 2024 and 13.3 per cent from August 2025. 

 

“Credit card spending fell 5.9 per cent Y-o-Y to ₹2.04 trillion in September this year, the first decline since February 2021. The main reason is last year’s high base. In September 2025, spending jumped 13.3 per cent over August after the GST rate cuts took effect and festival online sales began in the last week of the month. This year, festival sales start in October,” analysts at CareEdge said in their report.

 

HDFC Bank, the largest credit card issuer, recorded a 7.52 per cent Y-o-Y and 6.22 per cent month-on-month (M-o-M) increase in spending to ₹65,139.72 crore. SBI Card, the largest standalone credit card issuer, saw spending decline 14.09 per cent Y-o-Y and nearly 1.2 per cent M-o-M to ₹34,895 crore.

 

ICICI Bank recorded a 26.26 per cent Y-o-Y and 4.4 per cent M-o-M decline in spending to ₹30,911.48 crore. Axis Bank, another leading private-sector lender, saw spending fall 11 per cent Y-o-Y but rise 1.95 per cent M-o-M to ₹23,148.67 crore.

 

Analysts expect credit card spending to pick up in October and November as the festive season gathers pace.

 

Analysts of IDBI Capital in its report said, “The pick-up in card additions and steady growth in cards-in-force point to continued expansion in credit card penetration. With the festival season falling later this year, we expect October to capture a larger share of festival spends.”

 

The number of credit cards in force rose to 125.31 million in September, with leading issuers adding cards ahead of the festival season. HDFC Bank added 280,353 cards during the month, taking its total to 27.37 million. ICICI Bank added 29,621 cards to reach 19.86 million, while SBI Card added 208,026 cards to reach 23.16 million. Axis Bank added 259,525 cards, taking its total to 16.55 million.

 

The number of cards added rose 10.5 per cent Y-o-Y, marking the fastest growth in monthly card additions since November 2024.

 

“Banks continue to add cards, and customers are using them more often, though for smaller payments. We expect spending to rise to ₹2.28–2.38 trillion in October as festival sales begin, and to stay strong in November with Diwali. Higher prices and the recent rate hike could, however, hold back festival spending. The key thing to watch is how well banks get the customers added over the past year to use their cards more,” said Saurabh Bhalerao, director, CareEdge Ratings.