Credit card spending slips 2.8% to ₹2.02 trillion in August

Credit card spending contracted to ₹2.02 trillion in August, marking a 2.8 per cent decline from the previous month, according to latest figures released by the Reserve Bank of India. The slowdown reflects weakening consumer demand in a crucial spending season, with online transactions bearing the brunt of the pullback.

Online credit card expenditure fell particularly sharply, declining 7 per cent during the month. This represents a notable retreat from digital spending channels, which have increasingly become the preferred mode of card-based transactions in recent quarters. The broader contraction across spending categories suggests a cautious consumer sentiment amid economic uncertainties.

Despite the spending slowdown, the credit card market continued to show signs of expansion in terms of customer acquisition. The total number of outstanding credit cards rose to 124.05 million, indicating that growth in card issuance remained resilient even as usage patterns weakened. This divergence between card additions and spending levels may reflect a time lag before new cardholders accelerate their usage, or suggest that growth is coming from lower-spending customer segments.

The August contraction comes at a time when consumer discretionary spending typically strengthens ahead of the festive season. Industry observers will be watching closely to see whether the spending decline persists into subsequent months or represents a temporary moderation ahead of anticipated festive season revival.