Top credit card trends of 2025: Online shopping to airline and travel rewards

The credit card market in India has evolved rapidly over the past few years. With technological advancements, the market is no longer dominated just by physical plastic cards but is shaped by factors such as UPI integration and contactless payments.

In 2025, the credit card industry in the country saw major transformations, and the leading trends included a stronger focus on travel, higher spending driven by market expansion, more co-branded credit cards and e-commerce dominance.

Higher spending and market growth

Indian consumers are increasingly adopting credit, preferring credit cards over debit cards and making use of borrowing to manage their finances. Credit card spending in 2025 continued to grow steadily throughout the year.

As per recent RBI data, credit card spends touched a lifetime high of ₹2.17 trillion in value of total transactions in September 2025, surpassing the earlier six-month high recorded in March this year.

Total credit card transactions, in volume, grew to 496 million, led by festive demand and rising consumption across the country. Festive season offers, EMIs and other deals pushed credit card monthly volumes further.

In October 2025, the total value of transactions stood at ₹2.14 trillion, while total transactions grew to 519 million.

The sharp increase in credit card transactions shows the growth potential of the credit card market and a trend shift in consumer spending across the country.

Moreover, UPI integration through RuPay credit cards, which allows users to make QR code payments from their credit cards, has also expanded credit card accessibility and usage, especially in Tier-II and Tier-III cities.

Online shopping leads the spending

Amid rising credit card usage in India and higher spending through the credit lines, e-commerce and online spending make up the majority of transactions, dominating the market.

In September 2025, e-commerce (online) transactions accounted for over 66% of total credit card spend in value. Even in October and other months, e-commerce transactions manage to capture over 60% of the market.

POS share dropped below 35% in September 2025 for the first time in the financial year 2025-26 (FY26), making e-commerce the proven dominant player in the market.

While Point-of-Sale (POS) transactions still remain relevant, accounting for transactions in large amounts, they are gradually losing ground as even merchants are now pushing for cardless payment methods. Similarly, customers are increasingly adopting online shopping for everything, from groceries to movie tickets, and from electronics to travel bookings.

Regulation

In September this year, the Reserve Bank of India (RBI) announced that two-factor authentication (2FA) is now mandatory for all online transactions, and at least one factor must be unique to that transaction. The new rule will come into effect from April 1, 2026.

“All digital payment transactions in India are required to meet the norm of two-factor authentication. While no specific factor was mandated for authentication, the digital payments ecosystem has primarily adopted SMS-based One Time Password (OTP) as the additional factor,” the RBI said.

The RBI is encouraging the adoption of other factors now, like biometrics, device-native features, hardware tokens and tokenisation. With the introduction of new factors of authentication, SMS-based OTP will still remain an authentication factor.

This applies to credit card transactions as well, and is being done to make digital transactions safer.

Importantly, small-value contactless card transactions, recurring transactions (after the first one is authenticated), small-value offline digital payments and some other types of transactions are exempted from this rule.

Co-branded cards

Co-branded credit cards, payment cards issued jointly by a bank and a specific company like an airline or an e-commerce website, have been around for a while now. Credit card issuers have been launching many co-branded cards every year, offering specific benefits to users and expanding their user base.

This year as well, many new co-branded cards have been launched, including:

• PhonePe and HDFC Bank launched a RuPay co-branded card offering high rewards on UPI transactions on the PhonePe platform.

• IDFC First Bank launched a dual-network (Mastercard/RuPay) card in collaboration with IndiGo for airline customers, offering travel rewards and benefits.

• SBI Card launched new cards like the Tata Neu SBI Card, Apollo SBI Card SELECT, Bank of Maharashtra SBI Card, PhonePe SBI Card, Flipkart SBI Card and IndiGo SBI Card, all offering different and special benefits to users according to their needs.

• HDFC Bank also launched more co-branded cards, including Tata Neu Infinity and Plus cards.

Focus on travel

With increased consumption and more purchasing power, more and more people have been prioritising travel, and credit cards serve as a great tool for planning smart, budget-friendly trips.

Credit card issuers have followed the trend, with a strong emphasis on airline and travel-related rewards in collaboration with companies like Air India and IndiGo. Many credit card companies have announced better lounge access on their cards, and several new travel cards were launched in 2025.

Hotel credit cards have also gained popularity, like the HSBC Taj Credit Card and Marriott Bonvoy HDFC Credit Card.

For most customers, airport lounge access is one of the most important benefits for travel purposes. SBI Card recently announced its revised lounge access programme, which comes into effect in January, offering a large network of airport lounges to its credit card holders. Read more about it here.

Spending trends

On Diwali 2025, the number of credit card transactions in a single day crossed the 1.23 crore mark, valued at nearly ₹7,328 crore. This significant increase in credit card spending showed a shift in spending trends across the country.

Credit card spending on apparel, rental payments and airline bookings declined during the festive season, while spending on railways, travel agents and educational services increased substantially.

Data: SBI Research

What to watch out for in 2026

Here are some things consumers should watch out for in the coming year:

• Expansion of co-branded partnerships
• Tighter regulations and more secure transactions
• Higher UPI integration

Consumers should compare the interest rates, fees, and rewards offered by credit cards before getting one, and should also keep a check on their spending and credit utilisation to maintain a healthy credit score.