India's credit card market witnessed a marginal contraction in October 2025, marking a shift from the unprecedented credit card spending surge recorded during the previous month's festive season. Total credit card spending India reached Rs 2.1 trillion, declining by 1% from its September peak, as the impact of e-commerce credit card sales and festival-driven purchases began to wane.
The spending pattern revealed a notable transition in consumer behaviour, with online transactions bearing the brunt of the decline. Online credit card spending fell sharply by 13% month-on-month to Rs 1.3 trillion, while point of sale transactions India (PoS) at physical stores surged 22% to Rs 0.9 trillion. This divergence reflects the natural progression of festive season spending India, where high-value purchases made during September's e-commerce discount season India gave way to more traditional offline credit card spending for apparel, gifts, and decorative items in October.
The September Spending Phenomenon
The September 2025 spending spike was driven by a confluence of favorable factors. E-commerce platforms offered substantial discounts on big-ticket items including electronics, appliances, and smartphones. Additionally, a GST rate cut impact and the onset of the festive season created a perfect storm for consumer spending. Many buyers front-loaded their purchases of expensive goods during this period, taking advantage of deep discounts before the actual festival dates.
October's spending, while lower than September's exceptional levels, remained healthy at Rs 18,800 per card (credit card spending per card India). The shift toward lower-value purchases during the month reflects typical festive buying patterns, with transactor customers focusing on traditional items such as sweets, gifts, clothing, and home décor rather than consumer durables.
HDFC Bank Emerges as Clear Winner
The credit card market share India competitive landscape saw significant movement in October. HDFC Bank credit cards emerged as the standout performer, expanding its HDFC Bank market share credit cards by 97 basis points to reach 28.9%. The bank's dominance in PoS transactions, where physical retail spending grew substantially, proved to be a key advantage.
In contrast, other major players struggled to maintain their positions. ICICI Bank credit card market share declined by 88 basis points to 18.4%, while Axis Bank credit card market share shed 62 basis points, dropping to 11.4%. IndusInd Bank credit cards experienced an even steeper decline of 122 basis points, falling to just 2.5% market share. SBI Cards, the second-largest player, managed to hold relatively steady with a minor 7 basis point decline, maintaining an 18.7% share.
The competitive shuffling also saw RBL Bank credit cards climb to the fifth position among credit card issuers, displacing IndusInd Bank. Collectively, the top five players—HDFC Bank vs ICICI Bank credit cards, SBI Cards, Axis Bank, and RBL Bank—held approximately 80.9% of the market in October, down from 81.8% in September, suggesting some market share gains by smaller players.
Card Issuance Shows Moderation
The total number of cards in force India (CIF) reached 114 million in October, growing by 60 basis points from the previous month. This represents a normalization in credit card issuance India rates following the aggressive expansion during the festive season. Market concentration remains high, with the top four banks—HDFC Bank (22%), SBI Cards (19%), ICICI Bank (16%), and Axis Bank (14%)—controlling approximately 71% of all cards in circulation.
Analysts expect credit card issuance growth to moderate further in the coming months. The post-festive credit card trends typically see weakening discretionary demand, which could dampen both spending and new card acquisitions. Kotak Mahindra Bank cards was the only major issuer to lose market share in cards in force, declining by 2 basis points.
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Looking Ahead: Wedding Season Support
Despite the October dip, industry observers anticipate spending levels to stabilize in November. The onset of the India wedding season spending, traditionally a significant driver of credit card usage, is expected to provide support. Weddings in India typically involve substantial spending on jewelry, clothing, catering, and various services, much of which flows through credit cards.
Additionally, the positive sentiment from GST rationalization measures is expected to sustain consumption patterns. However, the overall trajectory suggests a return to more normalized credit card spending patterns after the exceptional September surge.
Concerns Over SBI Cards Valuation
Market analysts have expressed caution regarding SBI Cards despite its stable market share performance. The company faces several headwinds including a higher proportion of transactor customers—those who pay off balances in full rather than revolving credit—which limits interest income potential and extends the path to improved profitability.
Incred Research credit cards analysis maintains a SBI Cards reduce rating with a SBI Cards target price of Rs 700, compared to the current price of Rs 870. The research firm provides credit card valuation India at 3.7 times FY27 book value and 24 times FY27 earnings. Concerns include limited scope for credit cost reduction, elevated credit costs that continue to pressure returns, and the inherent risks of a mono-line business model focused solely on credit cards.
Analysts believe the company's return ratios will remain under pressure due to rangebound market share, tighter spending limits imposed by regulators, ongoing regulatory scrutiny of the credit card industry outlook India, and persistent credit quality concerns. Any significant improvement in profitability would require a substantial increase in revolver loan volume.
Market Implications
The October data suggests India's credit card market is transitioning from the exceptional growth phase of the festive season to more sustainable levels. The shift from online vs offline credit card spending indicates that physical retail continues to play a crucial role in Indian consumer behavior, particularly for certain categories of goods.
The performance divergence among major issuers highlights the competitive intensity in this space, with market leadership increasingly determined by strength across both digital and physical transaction channels. As the Indian banking sector analysis shows, issuers will need to balance growth ambitions with regulatory expectations and credit quality considerations to maintain sustainable business models.
