India's credit card spending surges while banks' interest income falls

Business Sep 03, 2026

India's credit card scene is blowing up, with people spending more on credit cards; annual spending has risen at a compound annual rate of nearly 27% between 2021-22 and 2025-26.

But here's the twist: the share of interest-bearing card balances has dropped from 21% to just 11%.

Thanks to cheaper ways to borrow, banks aren't earning as much from interest anymore.

HDFC Bank, SBI Cards margin squeeze

Major players like HDFC Bank and SBI Cards are seeing their margins shrink.

HDFC's share of credit card loans in its overall portfolio dropped, and even though SBI Cards saw retail spending rise by 14%, its interest income still slipped by 3%.

Analysts say this trend will likely keep cutting into bank profits through 2028-29 as spending habits keep changing.