As of FY26, the total outstanding credit cards reached 118.6 million, reflecting a modest 8% year-on-year growth, a sharp decline from the 19% increase recorded in March 2024. This slowdown is attributed to stricter regulations on unsecured lending put in place by the Reserve Bank of India in late 2023, which have reshaped growth patterns within the industry.
The reduction in new card issuance occurs even with a noticeable rise in spending, particularly evident in March. Credit card expenditures surged nearly 24% month-on-month to ₹2.19 lakh crore, achieving a three-month peak and bouncing back from a quieter February. However, this increase is largely seasonal and spurred by year-end financial activities, including advance tax payments and bulk purchases.
On an annual scale, credit card spending grew by 12% in FY26, totaling ₹23.62 lakh crore. While this growth is robust, it falls short of the high-teen growth rates seen prior to the regulatory changes, indicating a more restrained growth path for the sector.
The market remains concentrated, with the top five issuers holding approximately 74% of all outstanding cards. HDFC Bank maintains its position as the market leader, followed by SBI Card and ICICI Bank, among others.
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Shifts in spending patterns highlight evolving dynamics within the ecosystem. E-commerce continues to lead credit card usage, representing 64% of the total transaction value, while physical point-of-sale spending is increasing but still lags behind.
In conclusion, although credit card spending remains stable and shows monthly recovery, the overarching trend suggests a cooling growth cycle. The combination of slower card issuance and tempered annual spending growth indicates that the segment is no longer growing at the pace observed prior to regulatory interventions.
