Mumbai: India‘s credit card industry continued to expand in July, with the total number of cards outstanding rising 1% month-on-month and 9.9% year-on-year to 12.29 crore. However, spending trends remained mixed, with some major issuers recording strong growth while others saw only modest or weaker momentum.

HDFC Bank retained its lead in new credit card additions during the month, adding 2.30 lakh cards, the highest absolute addition among major issuers. SBI Cards followed with 1.83 lakh new cards, while ICICI Bank added 1.70 lakh cards.

At the same time, SBI Cards stood out for spending growth, recording a 22% year-on-year increase in July, the strongest among major issuers. The data points to continued expansion in India’s card market, although growth in card numbers is currently running ahead of spending momentum.

HDFC Bank leads new card additions

HDFC Bank continued to strengthen its position in India’s credit card market in July.

The lender added 2,30,067 cards during the month, up significantly from 1,63,511 cards added in June. This made HDFC Bank the largest contributor to net credit card additions among major issuers.

SBI Cards ranked second, adding 1,83,076 cards in July. ICICI Bank followed with 1,70,156 additions, while Federal Bank added 1,08,492 cards and IDFC First Bank added 82,723.

The industry-wide card base reached 12.29 crore by the end of July, representing a 9.9% increase from the same period last year. The number of cards also rose about 1% from June.

The continued increase suggests that banks and card issuers remain confident about expanding their customer base, even as spending growth has moderated.

SBI Cards records strongest spending growth

While HDFC Bank led card additions, SBI Cards emerged as the strongest performer in terms of year-on-year spending growth.

SBI Cards recorded a 22% YoY increase in spending in July, according to NDTV Profit’s analysis of the latest data. The company also added 1.83 lakh cards during the month, making it one of the largest contributors to the industry’s card expansion.

However, the spending picture for SBI Cards was not uniformly positive. A separate brokerage analysis cited by NDTV Profit found that its share of industry credit card spending declined 140 basis points month-on-month to 19% in July from 20% in June, even though its spending remained 22% higher than a year earlier.

This highlights the difference between year-on-year growth and sequential market-share movement.

ICICI Bank shows strong monthly recovery

ICICI Bank also delivered a notable performance in July, particularly on a month-on-month basis.

The lender recorded an 8% increase in card spending from June, the strongest monthly increase among the major issuers mentioned in the report. Its cards outstanding also grew 9% YoY, the highest growth among the major banks in the July data.

However, ICICI Bank’s year-on-year spending performance remained comparatively weak.

According to Morgan Stanley data cited by NDTV Profit, ICICI Bank’s spending declined 6% YoY in the year-to-date FY27 period. This indicates that the bank’s July monthly recovery needs to be viewed in the context of a weaker longer-term spending trend.

The contrasting figures show that credit card growth is becoming increasingly uneven across individual issuers.

Overall credit card spending remains moderate

The expansion in card numbers has not been matched by an equivalent increase in spending.

According to Reserve Bank of India data reported by The Economic Times, credit card spending rose 7.4% YoY and 3.4% month-on-month to Rs 2.08 lakh crore in July.

While the overall spending value remained above the Rs 2 lakh crore mark, the growth rate was significantly below the increase in transaction volumes.

Credit card transactions rose 24.5% YoY to 60.53 crore in July, more than three times the pace of growth in spending. As a result, the average transaction value fell nearly 14% to around Rs 3,440 from Rs 3,987.

This suggests that consumers are using credit cards more frequently but for smaller-value purchases.

Smaller transactions become a key trend

The widening gap between transaction growth and spending growth is one of the most important developments in the July data.

Morgan Stanley said transaction growth was around 24% YoY in July, substantially higher than spending growth. The brokerage interpreted this as evidence of a shift towards smaller and more frequent card transactions.

This trend could have implications for banks and card companies.

A growing number of transactions is positive because it indicates that consumers are increasingly comfortable using cards for everyday purchases. However, lower spending per transaction means that the increase in transaction frequency is not necessarily translating into an equivalent rise in revenue-generating spending.

Morgan Stanley also noted that spending per card declined 2.4% YoY in July, extending a trend that has lasted for 10 months.

SBI Cards sees strong growth but mixed signals

SBI Cards’ July performance presents a particularly interesting picture.

The 22% YoY spending growth was considerably stronger than the overall industry growth of roughly 7%-7.4%. Yet its sequential spending share declined, suggesting that the company is not necessarily gaining momentum across every segment of the market.

Jefferies attributed part of the month-on-month decline in SBI Cards’ spending share to moderation in corporate spending. The brokerage said the company’s point-of-sale spending share remained stable at 18%, while its online spending share fell to 20% from 22% in June.

Despite these mixed indicators, SBI Cards continued to post much stronger YoY growth than several large competitors.

HDFC Bank remains a major force

HDFC Bank’s position is strengthened by its performance in both card additions and spending.

The lender added the largest number of cards in July, while Morgan Stanley’s year-to-date FY27 data showed HDFC Bank’s spending rising 14% YoY. The bank also gained 1.2 percentage points in monthly spending market share on a YoY basis.

This combination of customer acquisition and spending growth keeps HDFC Bank firmly positioned among India’s dominant credit card issuers.

However, the bank’s July spending momentum was described as relatively stable compared with some peers. NDTV Profit said spending weakened at SBI Cards on a month-on-month basis while remaining largely stable at HDFC Bank.

Other banks show varied performance

The July data also revealed considerable differences among other issuers.

Bank of Baroda recorded the highest month-on-month growth in cards outstanding at 2% and also showed an improvement in spending trends. Kotak Mahindra Bank and Axis Bank reported healthy monthly recoveries in spending volumes.

Axis Bank, however, continued to experience relatively slower growth in card additions compared with some of its major competitors.

Morgan Stanley’s broader FY27 data showed that Federal Bank and AU Small Finance Bank also recorded strong spending growth, while Yes Bank and IDFC First Bank posted gains. In contrast, ICICI Bank and IndusInd Bank recorded declines in spending over the same period.

The data indicates that the Indian credit card market is no longer moving uniformly across lenders.

Digital payments continue to support card usage

The broader shift towards digital payments remains an important backdrop for the credit card industry.

Morgan Stanley said the online spending mix for the industry increased by 100 basis points month-on-month to 64% in July. Retail digital spending excluding NEFT also increased 18% YoY to Rs 44.7 lakh crore during the month.

Credit cards accounted for 4.7% of retail digital spending excluding NEFT, down 40 basis points YoY but broadly stable sequentially.

The increasing preference for digital transactions provides a long-term opportunity for card issuers, although competition from UPI and other payment methods remains intense.

What the July data means for card issuers

The latest figures present both opportunities and challenges for India’s credit card companies.

The positive side is the continued expansion in the number of cards. More than 1.26 million cards were added across the industry in July, according to RBI data reported by The Economic Times, taking the outstanding base to 12.29 crore.

Transaction volumes are also growing rapidly, showing that consumers are using cards more frequently.

However, spending growth is lagging behind both card additions and transaction volumes. The resulting decline in average transaction value and spending per card could limit the pace at which issuers convert customer growth into higher spending.

This makes the coming months important for the industry.

If spending per card begins to recover, banks could benefit from the expanding customer base. If consumers continue shifting towards smaller-ticket transactions, card issuers may need to focus more heavily on customer engagement, rewards, premium products and transaction frequency.

Conclusion

India’s credit card market continued its expansion in July, with cards outstanding reaching 12.29 crore, up 9.9% from a year earlier. HDFC Bank led the market in new card additions with 2.30 lakh cards, followed by SBI Cards and ICICI Bank.

SBI Cards, meanwhile, recorded the strongest year-on-year spending growth among major issuers at 22%. ICICI Bank posted the strongest month-on-month spending recovery, while HDFC Bank maintained its dominant position in card additions.

The broader industry, however, faces a clear challenge: spending is growing much more slowly than transaction volumes. With transactions rising more than 24% YoY while spending grew only around 7%-7.4%, consumers appear to be making more frequent but smaller purchases.

For banks and card companies, the key question will be whether the expanding card base can eventually translate into stronger spending per card. July’s data suggests that India’s credit card market is still growing rapidly, but the next phase of growth may depend more on spending quality than simply adding more cards.