Credit Card Spending Growth Slows in India Despite Surge in New Issuances: SBI Cards and Market Trends

India's digital payment ecosystem is witnessing a fascinating paradox. According to the latest data released by the Reserve Bank of India (RBI), while the total volume of active credit cards in the country is expanding at a robust pace—adding over 1 million new cards every month since May, including 1.27 million in July alone—the average spending pace per card is visibly moderating. This evolving trend unfolds alongside tightening reward structures and rising competition across the financial sector.

RBI Data: Credit Card Spending Surpasses ₹2 Lakh Crore Monthly

Market reports from global financial firms like JPMorgan and Jefferies indicate that the consistent surge in new card additions points to renewed risk appetite and aggressive sourcing strategies among major card issuers. RBI data reveals that between January and July, average monthly spending through credit cards across India consistently exceeded ₹2 lakh crore.

In July, the industry's overall credit card spending registered a year-on-year growth of 7.1%. However, this growth rate marked a deceleration compared to the 10% expansion recorded in June. Conversely, total card volume growth accelerated to 9% in July, up from 8.4% in June, demonstrating that consumer interest in acquiring and holding credit products remains exceptionally strong despite restrained per-card expenditures.

SBI Cards Sees Spending Growth Moderate to 22%

Among leading industry players, SBI Cards experienced notable shifts in July. Cardholders of SBI Cards increased their spending by 22% compared to the same period last year, though this represented a sharp moderation from the 34% growth rate witnessed in June. Consequently, the company's market share based on card spending contracted by 140 basis points month-on-month to settle at 19%.

Despite the slowdown in spending velocity, SBI Cards maintained a solid 7% year-on-year growth in overall card usage, while its outstanding card market share remained stable. New customer acquisition proved to be a strong highlight, with the company adding 180,000 (1.8 lakh) new cards on a net basis in July—reflecting a stellar 2.7-fold increase compared to the corresponding period last year. Performance among peers varied; HDFC Bank experienced a month-on-month dip in spend market share, while ICICI Bank and Kotak Mahindra Bank maintained steady positions.

Jefferies Maintains Cautious Stance as SBI Cards Stock Slips 25%

Reacting to moderating spend growth and intensifying market competition, brokerage firm Jefferies maintained a Hold rating on SBI Cards. Market pressures have taken a toll on equity performance, with SBI Cards shares sliding nearly 25% since the beginning of the year. Financial analysts emphasize that for SBI Cards and other issuers to reverse this downward stock trajectory, converting the current wave of aggressive new card additions into sustainable, high-value spend growth will be paramount.