Credit card transactions experienced a significant 24.1% year-on-year increase to 601 million in July, according to the Moneycontrol report. However, this surge in transaction frequency was not matched by corresponding spending growth, with overall spending through credit cards rising by only 7.4% during the same period, reaching ₹2.08 lakh crore. This widening gap between transaction growth and spending growth pushed the average ticket size down 13.5% year-on-year to ₹3,460 in July, representing a more pronounced decline than the 12.9% drop seen in June. As per the TradingView News report, this trend shows credit cards being used for many more transactions while the average value of each transaction is shrinking. According to the latest data from the Reserve Bank of India, outstanding debit cards stood at 1.03 billion as of July, while credit cards were at 122.9 million, highlighting the continued dominance of debit cards in India's payment landscape.
The decline in average spending is particularly linked to the increasing use of RuPay credit cards connected to UPI for small-value payments, as highlighted in the ACMIIL report. RuPay credit cards linked to UPI allow users to make payments at merchants through the UPI network without physically swiping or tapping their cards. According to the ACMIIL report, this growing preference for smaller-value transactions through UPI-linked credit cards is a key factor driving the decline in average transaction values. The report specifically links this fall to RuPay credit cards being used through UPI for lower-ticket transactions, though it does not quantify how much of the industry's overall transaction growth came from credit card-linked UPI. The TradingView News report emphasizes that while UPI-linked credit card payments can contribute to higher transaction volumes, the 24.1% rise in transaction volume should not be interpreted as being driven solely by UPI. As per the GlobalData report, the exponential surge in digital transactions, especially low-value payments through UPI, has coincided with India's expansion of formal financial services over the past decade.
The average monthly expenditure per credit card was ₹16,812 in July, marking a 2.2% increase from June but a 2.4% decline compared with the same month last year, as reported by Moneycontrol. Spending patterns varied considerably among major card issuers, with HDFC Bank reporting the highest average monthly spend per card at ₹22,322, followed by SBI at ₹17,392 and ICICI Bank at ₹17,278. Across the industry, the average monthly expenditure stood at ₹16,812. The GlobalData report notes that lower adoption of credit and charge cards reflects limited formal borrowing histories in large parts of the population, particularly in rural areas, as well as concerns over interest costs and debt. However, the expansion of the middle-class workforce, rising incomes, and greater awareness — amplified by banks' promotional campaigns — are supporting their adoption, according to the report.
Punjab National Bank (PNB) recorded 5.2 million credit card transactions in July, marking an 8.9% month-on-month increase after transaction volumes had surged six-fold in June. According to the ACMIIL report, this latest rise was attributed to PNB's partnership with Kiwi for UPI-based credit card payments. Credit card spending at PNB also recorded strong growth, rising 173% year-on-year and 8.6% month-on-month in July. Despite this sharp increase, PNB remains a relatively minor contributor to the overall credit card market, accounting for just 0.4% of industry-wide spending. The GlobalData report expects credit card usage to grow after integration with the Unified Payments Interface, the country's home-grown real-time payment system, suggesting that UPI-linked credit card adoption will continue to drive transaction volumes.
India's financial inclusion has shown significant progress, with the Reserve Bank of India's Financial Inclusion Index rising to 70 as of March-end from 67 a year earlier, according to the GlobalData report. This steady climb reflects improvements in financial literacy, consumer protection, and reduced inequalities in services. The expansion has been aided by wider bank-account ownership and inclusion initiatives like direct benefit transfers, bringing a much larger share of India's population into formal financial services over the past decade. As per the GlobalData report, consumers are gradually leaning toward credit cards, attracted by benefits such as reward points, discounts, and instalment options. The report emphasizes that while UPI-linked credit card payments can contribute to higher transaction volumes, the 24.1% increase in transaction volume should not be used to conclude that UPI alone drove the entire industry trend.
