India's Credit Card Boom Shows Cracks as Repayment Stress Rises: CIBIL Report

India's credit card industry has expanded dramatically over the last ten years. The number of cards issued jumped from 1.4 crore to 5.2 crore, and total outstanding balances on these cards grew more than eight times to reach Rs 3.1 lakh crore. This growth reflects how quickly Indians have taken to using credit cards for everyday spending.

However, a new white paper from TransUnion CIBIL, a credit information company registered with the Reserve Bank of India, warns that this rapid expansion has come with a downside. Since 2022, the share of cardholders falling seriously behind on payments has been rising steadily, going from 5.8% to 8.1% by March 2026. This reverses an earlier trend of improving repayment behaviour seen between 2016 and 2020, before the pandemic.

A key reason behind this stress is that credit cards are no longer the only form of unsecured borrowing people rely on. A decade ago, credit cards made up 56% of all unsecured credit products held by consumers. That share has now fallen to 38%, as small personal loans below Rs 50,000 and consumer durable loans have become popular alternatives for financing lifestyle purchases.

Consumers are also spreading their borrowing across more products at once. The proportion of cardholders who also hold other consumption-based loans has doubled from 16% to 32% over ten years. Similarly, the share of people holding three or more credit cards has nearly doubled, rising from 12% to 22%.

This creates a tricky situation for lenders. When a borrower has several loans and cards running simultaneously, it becomes harder to judge their true risk by looking at just one product. The report highlights a group it calls high exposure users, who make up about 10% of all cardholders. These borrowers use a large portion of their available credit and hold multiple unsecured loans, making them especially vulnerable if they miss payments on any one product.

Interestingly, the report finds that risk increases with experience in certain cases. Borrowers who have held cards for more than four years but also use many other credit products show delinquency rates 40 to 60 basis points higher than average. Among experienced cardholders who took out more than three personal loans in the last two years, delinquency rates reached 8.7%.

Younger borrowers are entering this complex credit landscape earlier than previous generations. Gen Z consumers, born between 1995 and 2010, are opening new loans after getting their first credit card at a faster pace than millennials did, and they already carry more existing debt at the same age compared to millennials.

Overall, only 33% of consumers today rely solely on a credit card for unsecured borrowing, down from 50% a decade ago. This shows that Indian consumers' borrowing habits have become far more diversified and layered, a shift that will shape both business opportunities and financial risks for lenders in the years ahead.