The landscape of India’s credit card market is evolving, with a significant influx of younger consumers. As of March 2026, a study by TransUnion CIBIL revealed that half of the new credit card users in India are aged 30 or below. This demographic shift indicates that credit cards are no longer predominantly utilised by established borrowers in metropolitan areas but are increasingly appealing to younger individuals in smaller towns and rural regions.

Furthermore, the study highlighted that 46 per cent of these new users reside in semi-urban and rural markets. This trend signifies a broader change in how Indians engage with formal credit, as many first-time credit cardholders are entering the market with prior borrowing experience. The findings suggest that younger consumers are adapting to credit products in a more informed manner.

The increasing participation of Gen Z in the credit card sector reflects a changing financial landscape. As they navigate their financial journeys, these young borrowers are likely to influence future trends in credit utilisation and management.

Growth of the Credit Card Market Over the Decade

India’s credit card market has witnessed substantial growth over the past decade. The number of credit cardholders surged from 1.4 crore in March 2016 to 5.2 crore by March 2026, marking an increase of 3.6 times. Concurrently, outstanding credit card balances rose dramatically, increasing from Rs 40,000 crore to Rs 3.1 lakh crore, an increase of 8.3 times during the same period.

The number of active credit cards also saw a fivefold increase, escalating from 2.1 crore to 10.7 crore. The average outstanding balance per cardholder nearly doubled, climbing from Rs 31,000 to Rs 65,000 over the decade. Despite this growth, credit card penetration among credit-active consumers remained at 25 per cent as of March 2026, which is notably lower than figures reported in countries such as the UK, Colombia, and Hong Kong.

The study emphasised that many young Indians are entering the credit card market after having engaged with other forms of borrowing. For instance, among Gen Z consumers aged 24 to 30 who acquired their first credit card in 2024, 31 per cent already had at least two open credit accounts. This contrasts sharply with millennials of the same age group in 2018, where only 30 per cent had prior credit experience.

Young Borrowers’ Rapid Adoption of Credit

Gen Z consumers are demonstrating a notable tendency to engage in higher spending and borrowing activities soon after obtaining their first credit card. Approximately 28 per cent of first-time credit cardholders from this generation had outstanding balances exceeding Rs 25,000 within three months of card issuance. This figure represents an increase compared to 20 per cent among millennials who entered the market in 2018.

Moreover, borrowing activity among Gen Z consumers extends beyond their initial credit card. Nearly 69 per cent of these young borrowers opened another credit product within 12 months of acquiring their first card, compared to 55 per cent of millennials in the previous cohort. Notably, 39 per cent of Gen Z consumers opted for additional credit products from the same lender that issued their first credit card, while the equivalent figure for millennials stood at 33 per cent.

The findings indicate that younger borrowers are diversifying their credit portfolios more rapidly than previous generations, showcasing a shift in borrowing behaviour.

Diversification of Credit Portfolios

The study revealed that credit cards now represent a smaller proportion of consumers’ overall borrowing portfolios compared to a decade ago. In March 2016, active credit cards accounted for 56 per cent of consumption-led credit accounts, but this share decreased to 38 per cent by March 2026. Additionally, credit card balances as a proportion of total consumption-led credit balances fell from 36 per cent to 26 per cent.

Simultaneously, the percentage of consumers holding only credit cards in their borrowing portfolios decreased from 50 per cent to 33 per cent. The share of borrowers with other consumption loans rose significantly, from 16 per cent to 32 per cent. The trend of consumers holding three or more credit cards also increased, with their share rising from 12 per cent to 22 per cent over the decade.

According to Bhavesh Jain, managing director and chief executive officer of TransUnion CIBIL, the evolving market is characterised by borrowers using credit cards alongside various short-term credit products. He emphasised the need for formal credit expansion to align with borrowers’ repayment capacities and overall financial obligations.

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