India’s credit card spending fell 5.9% year-on-year to ₹2.04 lakh crore in September 2026, marking the first annual decline since February 2021, according to Reserve Bank of India data reported by Moneycontrol. The decline came even as the number of credit cards in circulation increased to approximately 12.53 crore, highlighting a gap between the expansion of the card base and the amount consumers spent using those cards.
The main explanation may be timing rather than a sudden collapse in consumer demand. September 2025 benefited from GST rate cuts and the start of festive-season online sales, while major festive sales shifted to October this year. Online credit card spending fell 12.5% year-on-year, while spending at physical point-of-sale terminals rose 7.2%. These contrasting figures suggest that the timing of promotions and the mix of payment channels played an important role in the monthly result.
Key Takeaways
- First annual decline in more than five years: Credit card spending dropped 5.9% year-on-year in September 2026.
- Total spending: Card payments were worth ₹2.04 lakh crore, according to the RBI figures cited by Moneycontrol.
- Online spending weakened: Online credit card spending fell 12.5% year-on-year to ₹1.26 lakh crore.
- In-store spending increased: Point-of-sale spending rose 7.2% to ₹77,751 crore.
- More cards, lower spending per card: The outstanding card base rose 10.4% year-on-year, while average spending per card fell 14.8%.
- Festive sales shifted: Major online festive promotions took place in October 2026, unlike the late-September boost in 2025.
- Banks performed differently: HDFC Bank gained spending share, while several other major card issuers lost ground.
Why Did Credit Card Spending Fall in September?
The decline followed an unusually strong comparison period. In September 2025, the introduction of GST rate cuts and the beginning of online festive sales helped boost purchases. In September 2026, major festive promotions shifted into October, leaving the month with a less favorable year-on-year comparison.
CareEdge Ratings, cited by Moneycontrol, attributed much of the drop to this higher base. That means the September figures should not automatically be interpreted as proof that Indian consumers have stopped spending or that the economy has entered a broad consumption downturn.
However, the slowdown is still worth watching. CareEdge data cited in the report showed that credit card spending reached ₹12.18 lakh crore in the first half of FY2027, representing 4.9% growth. Growth slowed to 2.1% in the second quarter from 7.9% in the first quarter.
The figures point to moderation in spending growth, even if festive-season timing explains part of September’s annual decline.
Online Spending Falls While In-Store Payments Rise
The difference between online and physical spending was one of the most notable features of the September data.
| Credit card spending indicator | September 2026 | Year-on-year change |
|---|---|---|
| Total spending | ₹2.04 lakh crore | -5.9% |
| Online spending | ₹1.26 lakh crore | -12.5% |
| Point-of-sale spending | ₹77,751 crore | +7.2% |
| Total transactions | Approximately 61 crore | +23.2% |
| Average transaction value | ₹3,343 | -23.6% |
| Average spending per card | ₹16,305 | -14.8% |
Source: RBI data reported by Moneycontrol. Figures may not sum exactly because of rounding and reporting categories.
Online spending was particularly weak, declining to ₹1.26 lakh crore. Its share of total credit card spending fell to 61.70%, down 4.69 percentage points from a year earlier.
In contrast, payments at physical point-of-sale terminals increased to ₹77,751 crore. This suggests that the slowdown was not uniform across all types of card purchases.
The number of transactions also increased even as the total value fell. The average transaction value declined 23.6% to ₹3,343, indicating that more transactions were being made at lower average values.
CareEdge cited the absence of high-value festive purchases, greater use of credit cards through UPI and weakness in air travel as possible factors affecting spending patterns.
Why More Credit Cards Are Not Producing Higher Spending
India’s credit card base continued to expand during September. The number of outstanding cards increased 10.4% year-on-year to 12.53 crore, while banks added approximately 12.62 lakh net cards during the month.
Yet average spending per card fell 14.8% to ₹16,305. The contrast suggests that the growing number of cards did not translate into higher spending per card during September.
Several factors could explain the divergence. First, additional cards do not necessarily mean an equivalent number of new, active spenders because one person can hold multiple cards. Second, existing customers may have used their cards less during a month with fewer major online promotions. Third, consumers may have shifted some purchases to other payment methods.
The rise in transaction volume alongside the fall in average transaction size supports the idea that payment patterns changed during the month. But one month’s data cannot establish whether consumers are permanently moving away from credit cards or simply adjusting their spending around the festive calendar.
How Banks Performed During the Spending Slowdown
The decline affected banks differently, and some lenders gained market share despite the industry’s overall contraction.
According to CareEdge Ratings data cited by Moneycontrol, private sector banks increased their share of total credit card spending by 44 basis points month-on-month to 73.78%. Public sector banks’ share fell by 34 basis points to 20.41%.
| Bank category or lender | Reported September development |
|---|---|
| Private sector banks | Spending fell 6.2% year-on-year |
| Public sector banks | Spending fell 9.3% year-on-year |
| HDFC Bank | Spending rose 7.7% year-on-year; share reached 31.94% |
| SBI Cards | Lost spending share, according to industry analysis |
| ICICI Bank | Lost spending share |
| Axis Bank | Lost spending share |
HDFC Bank was a notable exception. Its share of overall spending increased to 31.94%, and its spending grew 7.7% year-on-year, according to the report.
The performance of public sector banks was mixed. Excluding State Bank of India, spending at public sector lenders rose 26.3%, according to CareEdge data cited by Moneycontrol. Their combined share increased to 3.30% from 2.46% a year earlier.
The divergence indicates that the industry’s decline did not affect every issuer equally. Banks with stronger customer engagement, product positioning or spending among higher-value customers may be better placed to gain share when overall activity weakens.
Is India’s Broader Digital Payments Market Also Slowing?
The credit card decline occurred alongside continued growth in India’s wider digital payments market.
A separate report by ET Now, citing Jefferies, said retail digital spending excluding NEFT increased 16.4% year-on-year to ₹44 lakh crore in September 2026. The report estimated that credit card spending fell 6.2% year-on-year to approximately ₹2.03 lakh crore, while the number of cards in circulation continued to grow.
The 5.9% decline reported by Moneycontrol and the 6.2% decline cited by Jefferies differ because the reports draw on different datasets and calculations. Both point to the same broad trend: credit card spending contracted year-on-year in September, while the wider digital payments market continued to expand.
This distinction matters. Credit cards are only one payment method, and their spending trends cannot be used on their own to measure all consumer spending in India. The shift toward UPI and other payment channels may also affect the share of transactions handled by credit cards.
The data therefore suggest a slowdown in credit card spending rather than a clear decline in the entire digital payments economy.
What Could Happen in October and November?
The festive-season calendar could help reverse September’s decline. CareEdge Ratings expected credit card spending to rise to ₹2.28 lakh crore–₹2.38 lakh crore in October as festive sales began, with spending expected to remain strong in November around Diwali.
That is a forecast, not a confirmed outcome. Actual spending will depend on the strength of festive demand, promotional activity, consumer confidence and how much purchasing shifts between payment methods.
October’s data will be particularly important because they can help distinguish a timing-related decline from a more persistent slowdown. If spending rebounds as expected, September’s contraction may prove to have been largely seasonal. If growth remains weak after the festive period, banks and analysts may need to examine other factors affecting card usage.
The Bigger Picture
September’s credit card data reveal a split between a growing number of cards and lower spending through those cards. The annual decline was influenced by an unusually strong September 2025 and the shift of festive promotions into October 2026, but the fall in average spending per card and the sharp reduction in online spending also deserve attention.
For banks, the figures make customer activity and spending share increasingly important measures of performance. For the wider economy, the key question is whether the contraction represents a temporary change in timing and payment behavior or a more sustained moderation in discretionary purchases. October and November data should provide a clearer picture.
FAQs
1. Why did credit card spending fall in September 2026?
Credit card spending fell 5.9% year-on-year to ₹2.04 lakh crore. The main explanation cited by CareEdge Ratings was a high comparison base in September 2025, when GST rate cuts and festive online sales boosted spending.
2. Was this India’s first annual decline in credit card spending since 2021?
Yes. The September 2026 decline was reported as the first year-on-year fall since February 2021.
3. Did online or offline credit card spending fall more?
Online spending fell 12.5% year-on-year to ₹1.26 lakh crore, while point-of-sale spending increased 7.2% to ₹77,751 crore.
4. Why did spending fall even though the number of credit cards increased?
The number of outstanding cards rose 10.4% year-on-year, but average spending per card declined 14.8%. More cards do not necessarily mean more active users or higher spending by each cardholder.
5. Will credit card spending recover during the festive season?
CareEdge Ratings expected spending to rise to ₹2.28 lakh crore–₹2.38 lakh crore in October and remain strong in November. These are forecasts, and the actual recovery will depend on festive demand and consumer spending patterns.
Looking Ahead
The October and November figures will be crucial in determining whether September’s decline was primarily a result of festive-season timing or whether credit card spending is facing a more persistent slowdown. A rebound would support the seasonal explanation, while continued weakness would raise questions about spending growth, online purchases and the role of alternative payment methods.
Banks will also be watching differences between issuers closely. HDFC Bank’s spending growth and the wider shift in market shares show that lenders can perform differently even when the industry contracts. The next few months should reveal whether these changes persist beyond the festive period.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
