India spends big with credit cards in ecommerce, fest tango

Core Insights - The festive season saw a significant boost in consumption due to GST rationalization, with credit card spending rising 19.6% year-on-year in October to ₹2.14 lakh crore, driven by strong e-commerce sales and festive purchases [8][6] - However, new credit card additions have slowed, with a drop to 6.27 lakh in October from 10.76 lakh in September, indicating a potential tapering off of festive momentum [8][7] - Private banks have strengthened their dominance in the credit card market, increasing their market share from 70.8% to 77.7%, while the share of other lenders has decreased from 29.2% to 22.3% [6][8] Credit Card Market Trends - New credit card originations have fallen 42% over eight quarters, from 76 lakh in Q2 FY24 to 44 lakh in Q2 FY26, highlighting a calibrated slowdown in acquisition [3][4] - Major issuers reported declines in net monthly additions, with HDFC Bank experiencing a 44% month-on-month decline, SBI Card down 26%, ICICI Bank down 46%, and Axis Bank down 25% [8][7] - The credit card market in India is highly consolidated, with the top four banks accounting for approximately 71% of all outstanding credit cards, around 77% of transaction volumes, and about 75% of transaction value [8][7] Customer Behavior and Asset Quality - New cards issued remain metro-centric, with private banks targeting higher-value customers, while asset quality pressures persist, with a portfolio-at-risk in the 31-180-day bucket at 4.1% [7][6] - The new-to-credit share has remained stable, indicating a maturing customer base, and there is a strategic shift towards driving higher spends from existing customers amid elevated delinquency concerns [7][6]