India’s credit card ecosystem showed a seasonal rebound in March 2026, but the broader trend points to a cooling growth trajectory after the post-pandemic surge.
Spends rise on seasonal push
Credit card spending rose 23.8% month-on-month (m-o-m) to Rs 2.20 lakh crore in March, driven by typical fiscal year-end consumption and resilient e-commerce demand. However, on a year-on-year (y-o-y) basis, growth remained muted at 9.0%, sharply lower than 22.4% seen in March 2025, largely due to a high base, says a report by CareEdge Ratings.
For FY26, total spending reached Rs 23.6 lakh crore, marking a 12.0% y-o-y increase—significantly slower than the 21.1% expansion recorded in FY25. The moderation reflects a gradual normalisation in credit card usage.
Private banks still dominant, but losing share
Private sector banks (PVBs) continued to dominate, accounting for 72.6% of total spends in March 2026. However, their share declined by 315 basis points y-o-y, indicating rising competitive pressure.
In contrast, public sector banks (PSBs) are steadily gaining ground, supported by deeper penetration in tier-2 and tier-3 markets and stronger customer acquisition. PSBs also benefited from increasing adoption of UPI-linked credit cards.
On the spending front, PVBs reported a 4.0% y-o-y decline in per-card spending to Rs 18,948, suggesting moderation in high-value discretionary consumption. Meanwhile, PSBs posted a robust 17% growth in per-card spending to Rs 16,847, reflecting improving customer engagement.
Card base expands, but remains concentrated
The total number of credit cards in circulation rose to 11.9 crore in March 2026 from 11.0 crore a year ago, registering an 8.0% y-o-y growth. The expansion was largely driven by PSBs, which recorded an 11.3% rise, aided by co-branded partnerships with e-commerce and fintech players.
Within PSBs, the SBI Group remained a key growth driver, with its card base increasing to 2.21 crore.
Despite this expansion, the market remains highly concentrated, with a handful of large private and public sector banks accounting for nearly 80% of total cards and spending.
Selective growth strategies emerge
PVBs reported a relatively moderate 8.3% y-o-y growth in card base, reflecting a more calibrated approach amid evolving risk considerations. Growth remained concentrated among select players, indicating tighter underwriting and cautious expansion.
Foreign banks, on the other hand, continued to shrink their portfolios, with card base declining 5.4% y-o-y due to strategic recalibration and portfolio transfers to domestic players.
Shift in spending patterns continues
Per-card spending rose 23% m-o-m to Rs 18,536 in March, driven by seasonal consumption and increasing use of UPI-linked credit cards for small-ticket transactions. However, y-o-y growth remained largely flat at 1.0%, indicating normalisation.
The utilisation gap between PVBs and PSBs is also narrowing, as PSBs benefit from rising digital adoption and UPI integration.
E-commerce anchors growth
Online transactions continued to dominate, accounting for over 61% of total credit card spends. E-commerce spending grew 8.4% y-o-y in March, reflecting sustained digital consumption trends.
At the same time, point-of-sale (POS) transactions grew 9.8% y-o-y, signalling a parallel recovery in offline spending.
PSBs outperformed across both channels, with e-commerce transactions surging 39.1% y-o-y and POS transactions rising 11.1%, highlighting their rapid digital catch-up and improving acceptance.