After an extended festive period from Aug. ‘24 onwards, coupled with a long wedding season, Feb. ‘25 data compiled by Asit C Mehta Research shows credit card spending hit the lowest growth rate during the month.
On a sequential basis, the spends for Feb. ‘25 was 9% lower at INR 1,672 Cr (USD 19 Bn) though there was a growth of 12% over Feb. ‘24.
Akshay Tiwari, AVP – Equity Research Analyst – BFSI, Asit C Mehta Investment Interrmediates Ltd, said, “The subdued performance observed in February can primarily be attributed to tax-related planning activities and the lack of festive occasions during the period.
This, coupled with increased caution within the industry regarding unsecured lending, led to consumer expenditure declining to a seven-month low.
While the overall growth rate has slowed, competitive dynamics among major players have intensified, with HDFC Bank and SBI each achieving a 10 bps increase in market share.
Meanwhile, card issuance rates have plateaued, recording a marginal growth of 0.4% MoM, which translates to approximately 440,000 new cards issued during the month.
We expect this tepid trajectory to continue in the near term before stabilizing.”
Banks, no the other hand continued with their growth on issuing credit cards during Feb. ‘25 according to ACMIIL research.
HDFC Bank led the pack with a growth of 21.6% followed by State Bank of India, which grew its issuance by 18.9%.
While IDFC Bank showed the strongest growth albeit on a lower base, Kotak Mahindra Bank and RBL Bank experienced minor declines in card issuances.
Average spends per transaction softened in Feb. ‘25 to INR 4,219 over INR 4,282 in Jan. ‘25. Total transactions also followed a similar trend with a sequential decline of 8% to 396 million in Feb. ‘25, marking the slowest growth YoY in over a year, according to AMIIL Research.
Editor’s Note
Consumers have been tightening their purses for discretionary spends since the beginning of 2025 due to various reasons, such as a saturated spending over Q2 & Q3 FY 24-25, low salary increments for the year ahead FY 25-26 and a general grim global outlook.
While the common man doesn’t really understand the impact of reciprocal tariffs being laid in India by the USA after President Trump took office in Jan. ‘25, the price rise in gold and a softer growth in real estate sales (primary and secondary) are some indicators of shape of things to come.
Credit Card users, mostly urban and semi-urban, aged upwards of 35, mostly use their credit wisely to spend today and pay later.
The fact that players like CIBIL, the nodal agency to track the credit worthiness of consumers for issuing other loans for buying a home or an automobile are scrutinising consumers credit history has made the middle class diaspora more conscious about their spends and non-payment of dues on time.
While everyone is wishing FY 25-26 to be better than the previous FY, reality will be revealed once the consumer sales during the first two festivals of Onam in Kerala and Ganesh Chathurthi in Western India are out. Usually, this trend follows other major festivals such as Diwali and Eid.