Credit card spending drops to 8-month low amid exams & market slump, RBI data shows

Credit card spending in India plunged to an eight-month low of Rs 1.67 lakh crore in February, according to data from the Reserve Bank of India (RBI). This decline in consumer spending coincided with the commencement of school board examinations and a sharp reduction in new credit card issuances, which nearly halved to 440,000 in February from 820,000 in January, reported The Economic Times. 

The downturn in India's equity markets during the first two months of 2025 also played a role in curbing big-ticket expenditures, particularly in metropolitan regions. Equity gains had previously been a significant driver of such expenditures. "

Major credit card issuers such as HDFC Bank, SBI Cards, and ICICI Bank reported fewer new cards in February compared to January, reflecting the broader trend of declining credit card usage. The total number of credit cards in force increased slightly to 109.3 million at the end of February, up from 108.8 million in January 2025. 

Consumer behaviour also shifted in February, with point-of-sale transactions dropping to Rs 62,124.91 crore from Rs 69,429.4 crore in January, Business Standard reported. E-commerce payments experienced a similar decline, falling from Rs 1.15 trillion in January to Rs 1.05 trillion in February. 

Outstanding credit card balances grew at a slower year-on-year pace of 15.6%, reaching Rs 2.9 lakh crore in the first nine months of the fiscal year. This is a stark contrast to the 32.5% growth seen during the same period last year. 

Despite the current downturn, the credit card industry is expected to continue growing, albeit at a slower rate. The combined effects of stricter lending policies, rising household debt, and economic fluctuations have created a challenging landscape for credit card spending in India.