Are Young Indians Spending More: India’s Credit Card Outstandings Soar 84,000% In A Decade

Reddit threads and posts on X (formerly Twitter) are increasingly flooded with stories of ordinary Indians drowning under the weight of credit card debt. Scroll through these forums on any given day, and you’ll find users sharing screenshots of inflated statements, complaining about ballooning interest, or seeking advice on how to negotiate with collection agents. The pattern is striking: young adults in their twenties and early thirties, often urban, educated, and digitally savvy, are increasingly trapped in cycles of revolving credit that began with seemingly manageable purchases.

One such story is that of *Ashika, a 23-year-old student in Mumbai. “I lost my job last year, and since then, I’ve been managing my EMIs and bills using credit cards. Now, all my credit cards are maxed out, and I’m unable to make any payments toward my loans or credit cards. My total outstanding amount, including loans and credit card dues, is around Rs 15–20 lakh,” she says. What began as a temporary fix during a phase of unemployment has snowballed into a debt trap, a reality that many in her generation are now confronting. 

Another young user, a 24-year-old from Bhopal, has been living with credit card debt for three years. “I’ve accumulated around Rs 1.5 lakh in credit card dues. After reviewing my expenses, I realised I’d actually spent only about Rs 80,000–85,000 — the rest is all interest. Until now, I was managing by paying just the minimum due each month, but I’ve completely run out of money,” he says. His story is far from unique.

According to Reserve Bank of India (RBI) data released in September 2025, India’s total credit card outstanding has surged more than 84,000 per cent in the last decade, rising to Rs 2.88 lakh crore in August 2025 from Rs 340 crore in August 2015. Much of this growth has been driven by rapid adoption among younger consumers. A 2024 report by CRIF High Mark showed that nearly 45 per cent of new credit card holders in India are under the age of 30, many of them first-time borrowers. 

Vijay Mani, Banking and Capital Markets Leader at Deloitte India, notes that the spread of credit cards across new regions and income groups has brought with it increased risk. He observes that “India’s credit card market has expanded rapidly over the past decade, driven by a demographic shift from metros to smaller cities and strong adoption among millennials and Gen Z. While low-value spends have migrated to UPI, customers continue to use credit cards for higher-value transactions, with EMIs emerging as a major driver across categories such as consumer durables, travel, and healthcare.”

However, Mani cautions that this expansion has also led to a rise in delinquencies and losses, as competitive pressures have caused both banks and NBFCs to relax their underwriting standards, which amplifies the risk-reward imbalance for lenders. 

The rapid expansion of digital payments through fintech firms, e-commerce platforms, and banking apps has made it easier than ever to access credit, often with just a few clicks. Aggressive marketing by banks and payment companies has dramatically increased credit card penetration in urban and semi-urban India. From cashback offers and lifestyle rewards to instant approval ads targeting young professionals, the message is clear: credit is convenient, aspirational, and within reach.

 RBI data shows that there are currently about 112 million credit cards in circulation, compared to 21.11 million in 2015. Behind this glossy façade lies a high-pressure sales machinery. A banker, speaking on condition of anonymity, admitted that credit card sales are often driven by steep monthly targets. “Employees have targets to meet, sometimes 20 or 30 cards a month,” he said. “There’s immense pressure from seniors, and in that rush, proper due diligence often takes a back seat. As long as the customer meets the basic eligibility requirements on paper, the card gets issued. Whether they can actually manage the repayments, which they have rarely looked into.”

Banks, in turn, have recorded massive profits from this credit card boom. High interest rates and quick digital processing have enabled banks to generate significant revenues. Credit card lending, which had been growing at single-digit rates before the pandemic, surged to an average annual growth of 20–22 per cent post-pandemic, raising concerns about financial stability and consumer over-indebtedness.

 One of the country’s largest private sector banks, IndusInd Bank, noted: “Key demographic drivers such as Gen Z and Millennials have boosted credit card uptake, given their preference for digital payments. Strong growth outside the metros has also been a key driver, with Tier II and Tier III cities showing significant growth, fueled by e-commerce adoption.” 

With high interest rates and rising debt, the RBI has had to step in to regulate the sector. In recent years, the central bank took several steps to manage growth, including increasing the risk weight on credit card receivables to 150 per cent for commercial banks and 125 per cent for NBFCs in November 2023, up from 125 per cent and 100 per cent, respectively. In simple terms, banks and NBFCs now have to keep more money aside for every rupee they lend on credit cards, making lending more expensive and controlling excessive growth.

For banks, this was a setback, as it curtailed growth in one of their fastest-expanding segments. From the regulator’s perspective, however, it was a necessary measure. “The nature of the unsecured lending business (credit cards being one segment) is such that there will always be some credit risk cost,” IndusInd Bank said in a statement.

Looking ahead, as the RBI continues to tighten regulations and banks implement stricter lending standards, the credit card sector is expected to grow more cautiously. Greater consumer awareness, improved financial literacy, and responsible borrowing practices will be crucial to prevent over-indebtedness while sustaining long-term growth in the digital credit ecosystem. 

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