According to recent data from the Reserve Bank of India, credit card spends in India have grown by 10.8% in January 2025, reaching INR 1.84 trillion. This growth is driven primarily by leading private and public sector banks, with ICICI Bank leading the surge in card usage. The total number of credit cards in circulation has also risen by 9.5%, reaching 108.9 million.
Experts attribute the sustained rise in credit card issuance to the ease and flexibility that credit cards offer, as well as the increasing income levels of the Indian middle class. Rising competition among credit card issuing banks and changing consumer profiles are also key factors.
The data also highlights the growing prevalence of credit cards in India, with the number of credit cards issued surging five-fold in 13 years, from about 20 million in 2011. The rapid rise in UPI-based payments, the increasing linkage of credit cards to online platforms, and the booming digital sales and services ecosystem have all contributed to the growth.
However, challenges remain, including high interest rates and the risk of falling into a debt trap. The high cost of interest and the risk of online frauds are also concerns for users. Data from CRIF High Mark and TransUnion CIBIL shows a sharp rise in credit card delinquencies, with credit card defaults reaching 1.8% as of June.
The growing financial burden is having severe consequences, with several cases of suicide reported due to debt-related stress. Additionally, the ease and convenience of spending can result in impulsive purchases, leading users into a difficult-to-manage debt cycle.
As a result, several major banks have revised their credit card offerings, introducing higher fees, restricted reward programs, and stricter spending conditions. This has made it tougher for users to fully capitalize on card privileges. As the credit card landscape continues to evolve, it is essential for users to be aware of the challenges and take steps to manage their debt effectively.