For the seventh straight month, during February 2025, Indian consumers showed reduced credit card use due to seasonal trends, based on RBI data studied by Asit C Mehta Investment Intermediates Ltd (ACMIIL). Industry figures show that total credit card expenditures decreased by 9% from one month to the next (MoM) to reach Rs 1,67,200 crore which stands as the lowest level detected in the past seven months. Yearly spending rose by 12% in February 2025 but the growth rate remained slower than in past months.
Consumer Sentiment And Transaction Trends
The market showed a decrease in transaction activity when monthly volumes reached 396 million, experiencing an 8% drop since the previous month. The number of credit card transactions experienced a 27% increase from February 2024 to the present month. The annual growth rate during this period was the lowest recorded in the past thirteen months. The February average transaction value decreased to Rs 4,219 while the initial figure in January stood at Rs 4,282 demonstrating increased caution on the part of consumers.
Seasonal Factors Impact Spending
Individuals typically allocate their spending into tax planning during February when compared to other months. Consumer spending tends to stay low following the conclusion of major festive expenditures in previous months as recorded by the Associated Chambers of Manufacturing Industry of India and Logistics (ACMIIL).
Credit Card Base Expands Modestly
The market reached 109 million active credit cards through a monthly increase of 0.4%. The yearly growth rate reached 9% for credit cards but this became the lowest expansion since June 2021, which signals that new card issuances are showing signs of slowing down after a period of rapid growth.
Market Leader Positioning Among Primary Players
The major credit card providers collectively enhanced their place in the market. HDFC Bank along with SBI expanded their market shares by 10 basis points leading to 21.6% and 18.9% respectively. The market share of Axis Bank shrank by 10 basis points to 13.5 percent while other key market players experienced no major changes in their market shares during this reporting period. IDFC First Bank led all mid-sized players as it achieved a significant 80 basis points increase in market share reaching 3.2% whereas RBL Bank and Kotak Mahindra Bank demonstrated minor declines.
RBI’s Recent Intervention Has Created Opportunities For Changes Throughout The Market
A recent RBI decision to remove restrictions on Kotak Mahindra Bank credit cards will alter the future market configuration. The market spending recovery outlook is hampered by seasonal demand patterns and the business sector’s reluctance to take risks during the timeframe of the February data analysis.
The Market Forecasts Modest Growth During Upcoming Periods
According to Akshay Tiwari of ACMIIL who holds the position of Assistant Vice President (AVP) and equity research analyst the February numbers showed lower figures because people made tax-related financial decisions as there were no major festivals that month. Spending registered a seven-month low as manufacturers remained cautious about improper unsecured lending programs.
The general market slowdown did not affect the intense competition between HDFC Bank and SBI which successfully increased their customer base. Monthly new card distribution failed to grow, which led to just 440,000 new issues during this period. The present slowness continues to impact the market and Tiwari predicts it will continue through the next period before stabilizing.
