March Sees Surge in Credit Card Spending Amid E-Commerce Growth

Significant Increase in Credit Card Spending

In March, credit card expenditures experienced a notable rise, climbing 23.8% month-on-month to reach Rs 2.20 lakh crore. This increase aligns with the typical seasonal trends observed at the end of the fiscal year and is bolstered by strong demand in the e-commerce sector, according to a report from Care Edge Ratings. However, when compared year-on-year, the growth was modest at 9.0%, a decline from 22.4% in March 2025, largely due to the base effect. For the fiscal year 2026, the growth rate for spending was recorded at 12.0% year-on-year, totaling Rs 23.6 lakh crore, a significant decrease from the 21.1% growth seen in FY25, indicating a gradual stabilization in credit card usage.

The report also noted an increase in the credit card base, which grew from 11.0 crore in March 2025 to 11.9 crore in March 2026, highlighting the ongoing expansion of card penetration in the market. Despite this growth, the market remains concentrated, with a few dominant issuers—primarily three large private banks and five major public sector banks—holding nearly 80% of the total cards in circulation, showcasing their strong distribution networks and established market presence.

Private Sector Banks Dominate Spending

According to Care Edge Ratings, private sector banks (PVBs) maintained their lead in credit card spending, accounting for 72.6% of total expenditures in March 2026. However, their market share has been gradually declining, with a year-on-year decrease of 315 basis points. Conversely, public sector banks (PSBs) are steadily increasing their market presence, particularly in tier-2 and tier-3 cities, which is enhancing their customer acquisition efforts. Private banks saw a 4.0% year-on-year drop in average spending per card, now at Rs 18,948, indicating a slowdown in high-value discretionary spending. In contrast, PSBs reported a healthy 17% rise in per-card spending, reaching Rs 16,847, reflecting better customer engagement and a growing trend towards UPI-based credit transactions.

Growth in Outstanding Credit Cards

As of March 2026, the total outstanding credit card base increased to 11.9 crore, marking an 8.0% year-on-year growth and a 0.8% month-on-month rise. This growth was primarily driven by PSBs, which experienced an impressive 11.3% year-on-year increase, aided by their extensive distribution networks and successful co-branded partnerships with e-commerce and fintech companies. Within the PSB sector, the SBI Group played a pivotal role, with its outstanding card base growing by 6.1% year-on-year to 2.21 crore cards. Meanwhile, foreign banks have been streamlining their card portfolios, resulting in a 5.4% year-on-year decline in outstanding cards, a trend attributed to strategic adjustments, including portfolio reductions and shifts that have led to a migration of card bases towards domestic institutions.