India’s credit card market is no longer being driven only by established borrowers in big cities. Younger consumers and people living in smaller towns and rural areas are increasingly entering the market, often with other loans already in their names.A new study by TransUnion CIBIL titled, ‘Beyond the Swipe 2026: How India Uses Card as a Credit Instrument,’ found that half of India’s new-to-credit card consumers were aged 30 or below as of March 2026, while 46% lived in semi-urban and rural markets.

The findings point to a shift in how Indians access and use formal credit, with first-time credit cardholders increasingly bringing existing borrowing experience with them.CREDIT CARD MARKET GROWS OVER THE DECADEIndia’s credit card market has expanded significantly over the past decade. The number of credit cardholders rose 3.6 times, from 1.4 crore in March 2016 to 5.2 crore in March 2026.Outstanding credit card balances grew even faster, increasing 8.3 times from Rs 40,000 crore to Rs 3.1 lakh crore over the same period.

The number of active credit cards also climbed fivefold, from 2.1 crore to 10.7 crore. The average outstanding balance per cardholder nearly doubled, rising from Rs 31,000 to Rs 65,000 during the decade.The study also found that credit card penetration remained at 25% of credit-active consumers in India as of March 2026.

This was lower than the levels reported for the UK at 70%, Colombia at 62% and Hong Kong at 98%, indicating room for further growth. One of the key findings is that many young Indians are entering the credit card market after already using other forms of borrowing.Among Gen Z consumers aged 24 to 30 who obtained their first credit card in 2024, 31% already had at least two open credit accounts.

Only 30% had no prior credit experience, compared with 56% of millennials of the same age when they entered the card market in 2018.The study also found that 18% of these Gen Z consumers had an active consumer durable loan, while 23% already had a small-ticket personal loan when they opened their first credit card.This suggests that a credit card is increasingly becoming an addition to an existing borrowing portfolio rather than the first step into formal credit.YOUNG BORROWERS ARE TAKING ON CREDIT FASTERGen Z consumers also showed higher spending and borrowing activity soon after getting their first credit card.Around 28% of first-time credit cardholders from this generation had outstanding balances of more than Rs 25,000 within the first three months of opening their cards. Among millennials of the same age who entered the market in 2018, the share was around 20%.Borrowing activity continued beyond the first card.

Nearly 69% of Gen Z consumers opened another credit product within 12 months of getting their first credit card, compared with 55% of millennials in the earlier cohort.Among those who took another credit product, 39% of Gen Z consumers did so with the same lender that had issued their first credit card. The comparable share for millennials was 33%.BORROWERS ARE DIVERSIFYING THEIR CREDIT PORTFOLIOSThe study found that credit cards now account for a smaller share of consumers’ overall borrowing portfolios than they did a decade ago, as borrowers increasingly use multiple credit products.Active credit cards accounted for 56% of consumption-led credit accounts in March 2016.

By March 2026, the share had fallen to 38%. Credit card balances as a proportion of total consumption-led credit balances also declined from 36% to 26%.At the same time, the share of consumers who held only credit cards in their borrowing portfolio dropped from 50% to 33%.

The proportion of borrowers with other consumption loans in their portfolios rose from 16% to 32%.Consumers holding three or more credit cards have also become more common, with their share increasing from 12% to 22% over the decade.TransUnion CIBIL managing director and chief executive officer Bhavesh Jain said the market was being shaped by borrowers using credit cards alongside small-ticket personal loans, consumer durable loans and other short-term credit products.He said the expansion of formal credit needed to remain aligned with borrowers’ repayment capacity, affordability and overall financial obligations.Why Responsible Borrowing MattersThe growing presence of younger consumers and borrowers from smaller markets offers lenders a wider customer base. But the rising use of multiple credit products also makes it important for borrowers to keep track of their total outstanding debt.A credit card can help build a credit history when used responsibly, but carrying large unpaid balances or taking on several loans without accounting for repayment obligations can strain household finances.For lenders, the challenge is to expand access while maintaining credit quality.

Jain said the focus should be on earning customers’ trust as their financial needs evolve, while encouraging disciplined borrowing throughout their credit journey.As more young Indians enter the credit card market, the next phase of growth may depend not just on how many people get a card, but also on how responsibly they use it.- Ends