India Credit Card Market Grows But Loses Dominance to UPI

India's credit card market experienced significant growth between March 2016 and March 2026, with the number of cardholders increasing from 1.4 crore to 5.2 crore. According to a white paper by TransUnion CIBIL, active credit cards grew five-fold to 10.7 crore, while outstanding balances rose 8.3-fold to Rs 3.1 lakh crore. Asset quality has also improved, with outstandings unpaid for 91 to 179 days falling to 1.7% in the year ending March 2026.

Despite this expansion, credit cards are losing their position as the primary unsecured credit product. Their share of consumption loans dropped from 56% in 2016 to 38% in 2026, as cards now compete with the Unified Payments Interface (UPI) and small-ticket personal loans under Rs 50,000. Only 8% of new credit card issuances went to new borrowers, compared to 26% a year prior.

Penetration remains low at 25% of the 25 crore credit-active population, trailing heavily behind markets like Hong Kong at 98% and the United Kingdom at 70%. The user base is diversifying, with 50% of new-to-card consumers aged 30 or below and 46% residing in semi-urban and rural areas. This shift indicates a consumer credit wallet that is becoming more formal and responsive to everyday consumption needs.