GST 2.0: Credit Card Spends Up Fivefold in Three Days

Consumer spending is racing ahead as new tax slabs begin to shape everyday payments.

How quickly can a policy change turn into a rush of payments? In September 2025, GST 2.0 was launched with a revised tax structure. Within three days, several reports pointed to a fivefold rise in credit card transactions under GST 2.0. 

This increase has been linked to festival discounts, merchant offers, and households using tax savings for immediate spending.

GST 2.0 Impact On Credit Card Spending

The rollout of GST 2.0 in September 2025 simplified tax slabs to 5, 18 and 40 percent. The idea was to reduce prices and lift consumer demand. The impact was visible in credit card usage surge after GST 2.0 rollout. Industry trackers showed daily card spends rising from about ₹5,500 crore before the reform to around ₹22,000–23,000 crore in the first three days.

Banks like BOBCARD reported a 40 percent rise in spending compared with their average monthly level. E-commerce platforms confirmed higher volumes, with households using credit cards more often for large orders.

Reported Rise In Card Transactions Under GST 2.0
 

The numbers reveal a sharp increase in credit card spends due to GST changes, though RBI will publish official confirmation in monthly statistics.

Effect Of GST 2.0 On Digital Payments Growth

GST 2.0 is not just about tax cuts. It is a move that creates more disposable income. When taxes fall, prices fall too, which encourages households to buy more. The effect of GST 2.0 on digital payments growth is clear. 

Reports showed e-commerce card spends growing almost six times in a single day. Debit card volumes tripled during the same window.

Digital payment growth was also reflected in RTGS flows. Large transactions moved faster as lower taxes made vehicle and appliance purchases more attractive. Analysts believe that such a sudden increase points to a stronger push towards electronic channels over cash.

Digital Payments During Rollout Of GST 2.0

The table shows that credit card spending is only one part of the story. The overall digital system also grew rapidly.

Past Link: Increase In Credit Card Spends Due To GST Changes

This is not the first time a tax revision has altered consumer behaviour. In 2024, smaller GST tweaks prompted reports of families switching to installment schemes on credit cards to smooth their expenses.

Now, the 2025 GST changes have nudged consumers in the opposite direction: rather than delay, buyers are pulling purchases forward to cash in on lower tax rates. As a LoansJagat article on “GST 2.0 Cuts Shopping Costs — 5 Credit Cards to Maximize Your Savings” notes, the revised tax regime makes essential purchases cheaper, and consumers are responding by combining GST benefits with credit card rewards and cashback.

This shift suggests that reduced indirect taxes are not just boosting consumption volume, but also timing, people buy earlier to capture the net savings.

Consumer Benefit In Different GST Cycles
 

The larger relief in 2025 explains why credit card spending picked up much faster than in earlier years.

How Government And Banks Reacted Before

India has seen different reactions in each GST cycle. During the 2017 launch of GST, banks were busy adjusting billing software. Consumers were cautious and card usage was limited. In 2020, during minor slab changes, banks started promotions but adoption was slower.

GST 2.0 in 2025 is a different case. Banks rolled out coordinated card offers and retailers quickly adjusted prices. Consumers responded with faster card swipes and higher online orders. This marks a learning curve for institutions that now react more smoothly to tax changes.

Bank And Consumer Reaction In Different Years
 

The table reflects how both banks and households have evolved in handling tax transitions.

What The Surge Means For The Economy?

The fivefold rise in credit card transactions under GST 2.0 has wider meaning for the economy. It points to higher confidence in digital payments. It also underlines how reforms can change daily habits within a short time.

The GST 2.0 model has been described by analysts as a move towards a consumption-led economy. The Axis Bank research report in September 2025 stated that India may now shift more weight from capex-led growth to demand-driven spending.

The response is also tied to the festive calendar. Families often save purchases for this time. With tax cuts adding to discounts, the surge became sharper. This raises a question: will the trend last once the season ends?

Conclusion

The introduction of GST 2.0 in September 2025 has triggered a credit card usage surge after GST 2.0 rollout. Consumers have spent more, banks have recorded higher volumes, and e-commerce has gained strongly. 

The reported fivefold rise has caught attention, but confirmation will come only when RBI releases its card usage data for September and October 2025.

The story so far shows one clear fact. Lower tax rates have the power to move spending patterns overnight. The surge in digital payments and cards shows that reforms reach people quickly. The coming months will reveal if this rush is a short burst or the start of a lasting shift in how Indians pay.

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LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.