Credit Card Spending Declines to Seven-Month Low in February
In a recent analysis, credit card expenditures have dropped to their lowest point in seven months, reflecting a notable shift in consumer behavior. According to a report by ACMIIL, a prominent stock market research firm, total spending on credit cards fell to ₹1,672 billion in February, down from ₹1,841 billion in January. This decline of 9% month-on-month (MoM) underscores a broader trend of reduced consumer activity.
Consumer Spending Trends
While February’s figures show a decrease, it’s important to highlight that credit card spending still rose by 12% compared to February 2024. However, this growth rate is significantly lower than the impressive 30% year-on-year (YoY) increase observed up until January 2024. This shift suggests a cautious approach from consumers in the current economic climate.
- Total credit card spending in February: ₹1,672 billion
- Spending in January: ₹1,841 billion
- MoM decline: 9%
- YoY increase from February 2024: 12%
- Average YoY growth until January 2024: 30%
Transaction Volume Insights
Transaction volumes revealed a mixed picture. On one hand, there was a 27% increase year-on-year in the number of transactions; on the other, they dropped by 8% compared to January 2025. This marks the slowest growth rate in over a year, indicating that consumers are utilizing their credit cards less frequently.
The average transaction value also saw a minor decrease, slipping from ₹4,282 in January to ₹4,219 in February. This suggests that consumers are becoming more selective with their purchases.
Factors Influencing Spending Behavior
Several factors may contribute to this cautious spending trend:
- Tax Planning: Many consumers tend to hold off on significant purchases during tax season, opting for more essential items instead.
- Lack of Spending Triggers: February lacks major festivals or events that typically encourage higher spending, leading to a drop in consumer activity.
Moreover, the average expenditure per credit card fell from ₹16,911 in January to ₹15,295 in February, reflecting a 9.6% decline month-on-month. This decrease, along with the slowing pace of new card issuances, paints a picture of a more restrained consumer landscape.
Conclusion
In summary, February’s credit card spending data highlights a trend of muted consumer engagement, both in the number of transactions and their overall value. As economic caution prevails and seasonal spending influences take hold, it remains to be seen how these patterns will evolve in the upcoming months. For those monitoring consumer finance trends, this slowdown could signal a shift in market dynamics worth keeping an eye on.
