India’s thriving credit card market is facing a significant challenge, with a recent surge in delinquencies signaling growing financial strain among consumers.
Credit Card Debts Soar
Credit card debts that are overdue by 91 to 360 days have skyrocketed by an alarming 44.34% over the past year. This amount now stands at Rs 33,886.5 crore as of March 2025, a significant jump from Rs 23,475.6 crore recorded in March 2024.
Data from CRIF High Mark, a credit bureau, reveals that nearly Rs 34,000 crore in credit card debt remains unpaid for over 91 days. This category of debt is often considered non-performing assets (NPAs) if it were a bank loan, highlighting serious repayment issues.
The distress is particularly acute in the 91–180 days overdue segment. Here, the delinquent amount climbed to Rs 29,983.6 crore, almost doubling from March 2023 levels. The “portfolio at risk” (PAR) for this bucket reached 8.2% in March 2025, showing a consistent rise over three years.
The Boom and the Burden
This surge in defaults comes amid a massive expansion of India’s credit card economy. The total value of credit card transactions hit Rs 21.09 lakh crore by March 2025, reflecting a nearly 15% increase year-on-year.
The number of active credit cards has also surged, reaching 11.11 crore in May 2025, up from 6.10 crore in January 2021. This growth reflects increased consumer confidence and a reliance on plastic for both essential and discretionary spending.
Banks and fintech companies have aggressively promoted credit card adoption with attractive offers like cashback, travel perks, and interest-free EMIs. While these incentives attract users, they can lead to overspending for those who aren’t cautious.
However, credit card debt is one of the most expensive forms of borrowing in India. Annual interest rates on unpaid balances typically range from 42% to 46% beyond the interest-free period. This high cost can quickly trap consumers in a cycle of debt if payments are missed.
What This Means for You and the Economy
The sharp rise in delinquencies poses risks not only to individual borrowers but also to the wider financial system. Credit card loans are unsecured, meaning they aren’t backed by any collateral. Increased defaults can strain banks’ balance sheets and potentially lead to tighter lending rules.
For individuals, falling behind on payments has immediate and long-term consequences. A damaged credit score can severely limit future access to loans, new credit cards, and even impact rental agreements or job opportunities in certain sectors.
Responsible Spending is Key
While credit cards offer flexibility and convenience, their misuse can lead to serious financial repercussions. Experts emphasize the need for consumers to manage their debt responsibly.
Financial institutions, regulators, and fintech firms have a role to play in educating consumers about interest rates, billing cycles, and repayment discipline. For everyone, the message is clear: credit cards are a powerful financial tool, not a source of free money. Use them wisely to avoid a heavy price.
- Credit card delinquencies in India surged by 44% to Rs 33,886 crore in the last year.
- This rise signals increasing financial stress despite a boom in credit card usage and consumer spending.
- High interest rates (42-46% annually) on unpaid balances can quickly lead to a debt trap.
- Responsible debt management and better financial literacy are crucial to mitigate these risks.
