Asit C. Mehta Investment Intermediates Limited (ACMIIL) has released its latest insights into the credit card market for January 2025, revealing key trends in credit card spending, transaction volume, spending patterns, and market share dynamics among leading banks.
Market Overview
Total credit card spending for the month reached Rs 1,841 billion, marking a 2% MoM decline but a strong 14% YoY growth. The spending contraction on a M-o-M basis was primarily due to seasonality effects, as December spending was boosted by festive and year-end expenditures.
The total credit card transaction volume in January 2025 stood at 430 million, reflecting a 31% year-on-year (YoY) growth, despite a 1% month-on-month (MoM) decline due to the high base of December 2024. The slowdown in transaction volume is attributed to increased caution driven by rising delinquencies.
Credit Card Circulation and Spending Trends
The number of outstanding credit cards stood at 109 million, declining by 1.2 million cards from December 2024. The average spending per card decreased slightly by 1% MoM to Rs 16,911, though it registered a marginal 1% YoY increase. The average spend per transaction was Rs 4,282, showing a 1% MoM decline and a 15% YoY decrease, reflecting evolving consumer behaviour and macroeconomic conditions.
Market Share Trends
Leading banks continued to strengthen their presence in the credit card segment: HDFC Bank increased its market share from 20.2% to 21.5% over the past year through aggressive customer acquisition strategies. SBI recovered from a dip in market share to 18.8%, adding 240,000 new cards in January alone.
ICICI Bank improved its share from 16.3% to 16.6%. The mid-cap segment showed mixed trends, with Yes Bank’s market share stagnating at 2.2% since September 2024, while IDFC First Bank increased its share from 2.4% to 3.1% over the past year.
Regulatory Developments
A key highlight of the month was the Reserve Bank of India (RBI) lifting its 10-month embargo on Kotak Mahindra Bank’s credit card issuance in February 2025. This move allows Kotak to re-enter the market, potentially reshaping the competitive landscape in the coming months. Kotak’s market share currently stands at 4.6%, reflecting the impact of the previous restriction. Despite short-term fluctuations in transaction volume and spending, the credit card industry continues to exhibit strong long-term growth. However, emerging trends in consumer spending and cautious lending practices will play a critical role in shaping the market’s trajectory in the coming months.
“Although the credit card data saw a moderation at an industry level in terms of new card dispatches, card spendings and transaction per card but the leading banks such as HDFC and SBI saw higher card dispatches and consequently leading to market share gain. The mid- sized banks continue to maintain caution and take a pause from their aggressive disbursement of cards,” stated Akshay Tiwari, AVP - Equity Research Analyst – BFSI, Asit C Mehta Investment Interrmediates Limited.
