Credit card spends slip 2.4% YoY in July 2026 despite record issuances

The overall number of credit cards outstanding increased to 122.9 million in July 2026 from 121.6 million in June, representing an 11.5% month-on-month increase and 9.9% year-on-year growth, according to RBI data. Sequential additions accelerated from 1.13 million cards in June, with issuers adding 11 million cards over the past year. Private sector banks demonstrated strong growth by adding 3.9 million cards during the January-July period to reach 86.91 million cards outstanding. Public sector banks also contributed significantly with 1.55 million new cards, bringing their total to 29.40 million cards. However, foreign banks saw a decline in card base, with outstanding cards dropping by 0.12 million to 4.24 million in July, despite continued spending growth. Morgan Stanley reports that industry cards-in-force grew 10% YoY in July, faster than spending growth of 7%, resulting in a 2.4% YoY decline in spending per card, extending a trend that has persisted for 10 months.

SBI Card emerged as a standout performer in July, reporting spends of ₹39,592 crore, up 21.6% year-on-year, significantly outpacing the industry average of 7.8% growth. However, spends declined 3.6% month-on-month from ₹41,077 crore in June, indicating some sequential moderation. The company demonstrated exceptional card acquisition strength by adding 1.83 lakh cards during July, taking cards outstanding to 2.28 crore. Net card additions were 2.7 times higher than the year-ago period, pointing to stronger sourcing and improving risk appetite among issuers. On the usage front, SBI Card recorded 7% year-on-year volume growth, while its outstanding market share remained stable. However, its spending market share declined 140 basis points month-on-month to 19%. JPMorgan analysts noted that "improving net card additions continue to underscore a pick-up in sourcing with an improving risk appetite at issuers."

Transaction volumes increased 24.5% year-on-year to 605.3 million, more than three times the growth in expenditure, indicating increased card usage frequency. However, the average value per transaction declined nearly 14% to about ₹3,440 from ₹3,987, suggesting cards were being used more frequently for smaller-value payments. As per The Economic Times, this trend reflects the growing adoption of credit cards for everyday transactions across various price points. CareEdge Ratings confirms that credit card transaction growth remained strong at 24% YoY in July, substantially ahead of spending growth, pointing to a shift towards smaller, more frequent transactions. The brokerage notes that card usage on a current cards-in-force basis has averaged just 0.1% YoY growth over the past 10 months, with newly issued cards typically taking one to two years to ramp up spending. This trend suggests consumers are using cards more often but the increase in transaction frequency is not translating into proportionate increases in overall spending.

The most concerning trend emerging from July 2026 data is the 2.4% year-on-year decline in average spending per card to ₹16,976, as reported by CareEdge Ratings. This decline is attributed to a high base in the same period in the previous fiscal, but it represents a significant shift from the previous month's performance. The sequential rebound of 2.3% month-on-month offers some hope for recovery, but the pace of card issuance outpaces aggregate transaction volume growth, creating a fundamental imbalance in the market. Morgan Stanley warns that spending growth is not keeping pace with either card additions or transaction volumes, with the brokerage observing that industry spending per card has remained under pressure, with the two-year lag basis showing average growth of -9% YoY. The key metric going forward will be whether higher transaction frequency eventually translates into stronger spending per card, as until that happens, the industry's growth story could remain more volume-led than value-led.