Are Indians Reducing Credit Card Usage? Exploring the Growing Credit Card Landscape Amidst a Stable User Base
India’s credit card market has seen significant growth over the past decade, yet it remains underutilized. A report by TransUnion CIBIL reveals that only one in four credit-active consumers in India holds a credit card. Currently, there are 5.2 crore credit card holders among an estimated 25 crore credit-active individuals, indicating a substantial gap compared to other markets.
Limited Penetration Compared to Global Standards
Bhavesh Jain, managing director and CEO of TransUnion CIBIL, noted that credit card usage in India lags behind several developing and developed countries. For instance, credit card penetration stands at 62% in Colombia, 70% in the UK, 81% in the USA, and 98% in Hong Kong, while India sits at just 25%. The report also highlights a decline in new-to-credit customers, which accounted for only 8% of new credit card additions, down from 26% the previous year.
Changing Consumer Preferences
The white paper indicates that credit cards are losing their status as the primary unsecured credit product. Alternatives such as Unified Payments Interface (UPI) and personal loans are gaining traction. Currently, credit card transactions incur a merchant discount rate of up to 2%, with users earning rewards. However, only state-promoted RuPay credit cards are compatible with UPI apps, limiting options for users with Visa and Mastercard.
Growth in Credit Card Metrics
Despite these challenges, the credit card industry has experienced notable growth. Outstanding credit card balances have surged 8.3 times to Rs 3.1 lakh crore, while the number of credit card holders has increased 3.6 times to 5.2 crore. The total number of credit cards in circulation has risen 5.1 times to 10.7 crore. Consumer behavior has also evolved, with the percentage of individuals holding three or more credit cards rising from 12% to 22% over the past decade.
Portfolio Quality Improvement
On the quality of credit portfolios, the report indicates that the deterioration seen during the Covid-19 pandemic has improved. As of March 2026, credit card outstandings overdue by 91 to 179 days decreased to 1.7%, down from 2% the previous year, reflecting a positive trend in overall portfolio quality.
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