Credit card spends in India rise sharply despite festive slowdown

Credit card spends in India surged nearly 20 percent in recent months even as the festive season recorded softer than expected consumption. The main keyword credit card spends in India signals a shift in how consumers are using credit for travel, electronics, medical expenses and day to day purchases despite muted festival demand.

India’s credit ecosystem continues to expand at a rapid pace. Data from industry trackers shows sustained month on month growth driven by increased card penetration, reward linked transactions and higher digital adoption. The festive season did not deliver the typical spike, but overall spending stayed strong because of travel bookings, utility payments and lifestyle purchases.

What is driving the rise in monthly credit card usage
(credit card growth India)

The 20 percent rise in credit card spends is linked to multiple behavioral shifts. Most consumers now prefer using cards for online marketplaces, fuel payments, hotel stays and national highway toll charges. These categories have seen steady usage throughout the year and did not rely on festive excitement to drive growth.

Banks have also expanded premium and co branded card portfolios. These products offer aggressive reward points, cashback and partner discounts. This has pushed consumers to route more payments through credit cards instead of UPI or debit cards. UPI remains dominant for small ticket transactions, but higher value purchases continue to shift toward cards.

Another growth vector is travel. International and domestic travel bookings rose consistently through the second half of the year. Airlines, hotels and travel portals have run card exclusive offers, drawing more users to use cards for large and medium sized purchases. Many issuers report significant growth in cross border card transactions as well.

Festive slowdown masked steady year round consumption
(festive season spending India)

Retailers observed lower footfall and moderated electronic sales during the festive window compared to earlier years. Rising interest rates and cautious middle class sentiment kept big ticket purchases in check. However, this moderation did not dent broader credit card usage because categories like insurance premiums, fuel purchases, pharmacy bills and OTT subscriptions grew steadily.

This reflects a shift away from festival dependent consumption cycles. Urban and semi urban buyers now spread out purchases across the year instead of concentrating on a few sale periods. Card data patterns show that utility payments alone account for a large portion of month on month spend stability.

Online marketplaces also witnessed mid tier sales instead of the high intensity discount cycles seen previously. As a result, consumer spending did not spike but remained balanced. This kept credit card transactions high but flattened the festive curve.

Banks expand issuance and credit limits to support spending
(credit card issuance India)

Banks and non banking financial companies have played a central role in sustaining credit card growth. Issuers added millions of new cards during the past year driven by aggressive onboarding campaigns at airports, malls and corporate parks. The share of first time cardholders is rising as younger professionals adopt credit earlier in their financial journey.

Credit limits on existing cards have also increased for many users. Banks rely on risk scoring models based on spending history, repayment consistency and income bracket. Higher limits translate into larger transaction capacity across travel, electronics, education fees and rent payments through intermediary platforms.

Several issuers have launched cards targeted at gig workers, freelancers and self employed users. These new segments contribute to steady recurring payments tied to business expenses and personal consumption. The wider acceptance of credit card payments across digital and offline channels further strengthens the ecosystem.

Underlying risks and changing consumer behavior
(consumer credit risk India)

Despite strong growth, lenders are monitoring repayment patterns closely. Rising discretionary credit usage raises the need for responsible spending. Banks report generally stable delinquency levels, but they continue to adjust underwriting models to avoid excessive risk concentration in younger and first time users.

Consumers are also using credit cards strategically to access short term liquidity. Many opt for no cost EMI conversions on electronics, furniture and smartphones. This increases transaction volume but can intensify repayment pressure if multiple EMIs overlap. Financial advisors warn that households should balance credit usage with clear repayment planning.

On the positive side, credit card literacy is improving. Users increasingly leverage features like spend trackers, credit score dashboards and alerts. This supports healthier long term credit behavior and encourages more responsible borrowing.

Outlook for India’s credit card market
(India digital payments outlook)

The long term outlook for credit card spends in India remains strong. Digital adoption continues to build, more retailers accept cards, and banks invest in fraud prevention systems that improve user confidence. While festive spending may continue to fluctuate, structural growth in everyday essential categories ensures consistent credit card usage throughout the year.

Analysts expect travel, fuel, insurance, education and healthcare to remain high contribution categories. Co branded partnerships with airlines, hotels and e commerce platforms are likely to expand further. As economic activity stabilizes, monthly credit card spends should maintain a healthy growth trajectory.

Takeaways:
Credit card spends in India rose nearly 20 percent despite muted festival demand.
Steady spending in travel, utilities and online payments supported month on month growth.
Banks expanded card issuance, limits and co branded offerings to boost adoption.
Risk management remains important as younger users enter the credit ecosystem.

FAQs:
Why did credit card spending rise even during a festive slowdown?
Because essential categories like travel, insurance, utilities and fuel maintained steady demand throughout the year.

Is the rise linked to more people getting credit cards?
Yes. Banks issued more cards, increased limits and expanded rewards programs, which led to higher overall usage.

Did UPI impact credit card growth?
UPI dominates small payments, but cards remain preferred for larger purchases, travel bookings and reward driven spending.

Is higher credit usage risky for consumers?
It can be if not managed well. Users must track EMIs, maintain good repayment discipline and avoid overspending.