According to a TransUnion CIBIL report, half of India's first-time credit card users are now from Generation Z (Gen Z), with 50% of new-to-credit-card consumers aged 30 years or below as of March 2026, up from 43% in March 2022. This demographic shift reflects a significant change in formal credit adoption patterns, as younger consumers increasingly enter the credit ecosystem. The report, titled 'Beyond the Swipe 2026: How India Uses Cards as a Credit Instrument', shows that 46% of first-time cardholders come from semi-urban and rural markets, compared with 42% four years ago, indicating credit cards are no longer confined to urban, affluent borrowers. As reported by TransUnion CIBIL, nearly one-third of Gen Z consumers aged 24-30 already had at least two active credit accounts before obtaining their first credit card in 2024, compared with a much lower share among millennials when they entered the market in 2018.
India's credit card market has experienced dramatic expansion over the past decade, with the number of credit card holders rising 3.6 times to 5.2 crore in March 2026 from 1.4 crore in March 2016, while active credit cards increased fivefold to 10.7 crore. However, as reported by TransUnion CIBIL, the market has reached maturity with credit card penetration remaining relatively low at 25% of credit-active consumers as of March 2026, compared with 70% in the United Kingdom, 62% in Colombia, and 98% in Hong Kong. According to Bhavesh Jain, managing director and CEO of TransUnion CIBIL, despite improved repayment behaviour and positive trends supporting consumer lending, credit card penetration in India is low compared to many other developing countries. The report indicates that despite rapid growth, India's credit card market is not expanding in terms of balances and cardholders, despite credit performance improving considerably.
According to the TransUnion CIBIL report, outstanding credit card balances grew 8.3 times to ₹3.1 trillion from nearly ₹40,000 crore over the past decade, while the average outstanding balance per consumer more than doubled to ₹65,000 from ₹31,000. However, the report notes that credit cards are playing a smaller role in bringing first-time borrowers into the formal credit system, with only 8% of new credit card issuances to first-time borrowers, down sharply from 26% a year ago. As reported by TransUnion CIBIL, the number of people holding three or more credit cards in their wallet has grown to 22% from 12% a decade ago, while live cards' share in consumption loans has decreased to 38% from 56% in the same timeframe. The report highlights that credit cards -- which are mainly used for consumption -- have ceased to be the dominant unsecured product in a customer's wallet, with alternatives such as Unified Payments Interface (UPI) and personal loans competing for market share.
As reported by TransUnion CIBIL, around 28% of Gen Z NTCC consumers had balances above ₹25,000 within the first three months of receiving their first credit card, compared with about 20% of millennials in 2018. Gen Z borrowers were more likely to hold consumer durable loans and small-ticket personal loans before receiving their first card, with 18% holding an open consumer durable loan and 23% holding an open small-ticket personal loan at first card opening. Around 69% of Gen Z first-time cardholders also took another credit product within a year of getting their first card, compared with 55% of millennials. Among consumers who opened another product, 39% of Gen Z consumers did so with their first credit card issuer, compared with 33% for millennials. The findings show that 31% of Gen Z consumers already had two or more open credit accounts at the time of first card origination, while the share of consumers with no prior credit experience was lower at 30% for Gen Z in 2024, compared with 56% for millennials in 2018.
According to Bhavesh Jain, managing director and CEO of TransUnion CIBIL, as credit cards compete with personal loans, consumer durable loans and other retail products, these other retail products have grown significantly faster than credit cards. The report indicates that despite rapid growth, India's credit card penetration remains significantly lower than global benchmarks, suggesting substantial headroom for expansion. The report segments non-NTCC card consumers into four personas based on credit utilization: card-centric users (33%), occasional card users (18%), diversified credit users (12%), and high exposure users (10%). As reported by TransUnion CIBIL, the role of the first credit card is changing, with many new cardholders entering the market with prior credit experience and existing credit products already in their wallet. At present, a merchant discount rate of up to 2% is charged for each credit card transaction, while there are also sweeteners such as reward points that users enjoy.
