India Credit Card Spending Slows: SBI Cards Faces Mixed Signals

India’s credit card spending growth experienced a notable deceleration in July, even as transaction volumes continued their sharp ascent. This divergence points to a shift towards smaller-ticket, more frequent transactions across the sector.

Amidst this trend, SBI Cards & Payment Services reported strong spending growth but also a sequential decline in its market share. This combination of factors has prompted caution from brokerages such as Morgan Stanley and Jefferies regarding the latest card data.

Industry Spending Trends Slow

Morgan Stanley analysts observed a broad decelerating trend in monthly industry credit card spending growth. This figure fell from 22.5% year-over-year in March 2025 to 7.4% in July 2026.

Jefferies separately reported July industry credit card spending growth at 7.1% year-over-year, marking a decrease from 9.7% in June. Industry cards-in-force expanded by 10% year-over-year in July, outpacing spending growth and resulting in a 2.4% year-over-year decline in spending per card, a trend now sustained for ten consecutive months.

The data highlights a significant difference between transaction and spending growth. Credit card transaction growth remained robust at 24% year-over-year in July, considerably ahead of the overall spending growth.

This suggests an increased frequency of card usage for smaller purchases, where more transactions do not proportionally increase total spending. This dynamic continues to exert pressure on spending-per-card growth.

SBI Cards Navigates Shifting Landscape

SBI Cards recorded a 22% year-over-year spending growth in July, although this represented a moderation from the 34% observed in June. The company’s share of industry credit card spending decreased by 140 basis points month-over-month, settling at 19% from 20% in June.

This sequential decline could be linked to a moderation in corporate spending. Despite the monthly drop, SBI Cards achieved a 2.2 percentage point gain in monthly spending market share on a year-over-year basis.

In July, HDFC Bank led in card additions, adding 2.30 lakh cards, while SBI Cards added 1.83 lakh cards. ICICI Bank reported a 9% year-over-year rise in cards outstanding but experienced a 6% year-over-year decline in spending.

Online Transactions Dominate Mix

The industry’s spending mix continues its shift towards online transactions, with the online spending component increasing by 100 basis points month-over-month to 64% in July. Conversely, SBI Cards saw its online mix moderate by 100 basis points month-over-month.

Retail digital spending, excluding NEFT, grew 18% year-over-year to Rs 44.7 trillion in July. Investors are now closely monitoring whether this higher transaction frequency will eventually translate into stronger spending per card, as the industry’s expansion remains predominantly volume-led rather than value-led.