The credit card sector in India is witnessing a slowdown, with disbursement growth falling to a four-year low, according to a report by ACMIIL, a stock market firm. The report, which provides insights into the credit card segment for January 2025, highlights a decline in total spending and a drop in the number of credit cards in circulation.
Aggregate credit card expenditure in January stood at Rs 1.84 trillion, marking a month-on-month (MoM) decline from Rs 1.88 trillion in December 2024.
Despite this drop, spending was up 14 per cent on a year-on-year (YoY) basis. The MoM decline was primarily due to a high base in December, when spending typically rises due to year-end festivities and New Year celebrations.
The report also added that the transaction volumes followed a similar trend, falling 1 per cent MoM to 430 million transactions. However, YoY transaction growth remained strong at 31 per cent.
Despite this, the report pointed out that this was the weakest YoY growth in transaction volumes since March 2024, indicating a sustained slowdown in the sector.
The report said “Notably, this represents the weakest YoY growth in transaction volumes since March 2024, underscoring a persistent deceleration trend within the sector”.