Credit card spending dropped in January: What is prompting consumers to tighten purse strings?

Total credit card expenditure in January 2025 declined to ₹1.8 trillion, reflecting a 2 per cent month-on-month decline and a 14 per cent year-on-year jump.

Notably, the month-on-month decline in credit card expenditure can be attributable to a base effect since December saw elevated spending on account of year-end and new-year-related expenditures.

Transaction volumes similarly declined, reflecting a 1 per cent month-on-month dip to 430 million despite sustaining a 31 per cent year-on-year growth, according to monthly credit card insights data shared by Asit C Mehta Investment Intermediates.

Expenditure per card

The average expenditure per card fell by 1 per cent month on month to ₹16,911, although it showed a marginal 1 per cent year-on-year rise. Concurrently, the average spend per transaction settled at ₹4,282, reflecting a 1 per cent month-on-month decline and a pronounced 15 per cent year-on-year decline, signalling evolving consumer behaviour or potential macroeconomic pressures.

(Source: Asit C Mehta Investment Intermediates)

Meanwhile, the total count of outstanding credit cards decreased to 109 million, down from 110 million in December, translating to a net withdrawal of 1.2 million cards from circulation.

On an annual basis, card issuance growth slowed to 9.4 per cent, the lowest rate recorded, indicative of tightening credit policies or subdued demand, the data showed.

Market leaders

HDFC Bank holds a 21.5 per cent share of the overall credit card market in the country, based on the number of cards outstanding. This is followed by an 18.8 per cent market share held by SBI Card and a 16.6 per cent share of ICICI Bank.

The fourth largest share of the credit card market is held by Axis Bank (13.6 per cent). The top five banks hold a 75 per cent share in terms of outstanding cards, the report further notes.

Other banks that hold smaller than 5 per cent market share include RBL Bank, Kotak Mahindra Bank, IDFC First Bank, IndusInd Bank, Bank of Baroda and Yes Bank.

Note: Using a credit card carries its own set of risks.