According to a TransUnion CIBIL white paper, Gen Z consumers aged 30 or below made up half of all first-time credit card customers in March 2026. Among those aged 24 to 30, 31% already had at least two active credit products. Within three months of receiving their first card, 28% had built balances of ₹25,000 or more, while 69% took on another unsecured loan within a year. As reported by Business Standard, this data reveals that Gen Z is entering the credit-card market earlier and building debt faster than previous generations.
According to BankBazaar.com, credit is no longer a habit for Indians - it's becoming a financial tool for planned goals. The conversation is gradually shifting from borrowing more to borrowing wisely, with borrowers now prioritizing wise, responsible credit utilization over quick approvals. Credit is used as a tool for planned goals, assessing repayment capacity, with more people looking beyond borrowing more to borrowing wisely. This reflects a healthier and more balanced approach to managing money, where borrowers are focusing on responsible borrowing and financial discipline rather than seeking maximum approvals.
Financial experts recommend that credit card spending should be restricted to 20-30% of take-home income, provided the entire balance is repaid every billing cycle. According to Olyv co-founder and CEO Rohit Garg, affordable card spending should be determined from monthly cash flow after accounting for essential expenses, existing EMIs, and other investments. Savings should ideally be at least 20% of take-home income, says Saurabh Bansal, founder of Finatwork Investment Advisor. Users should factor in every loan instalment while assessing affordability, with total monthly debt obligations preferably remaining below 35-40% of take-home income. The amount of a credit card's spending limit that you use each month, also known as your credit utilization, is an important ingredient in your credit score and one of the easiest to control.
Financial advisors emphasize maintaining credit utilisation below 30% as a prudent practice. As reported by Business Standard, utilisation of 10-20% is considered preferable for a strong credit profile. Arun Ramamurthy, author of Unlock the Power of Your Credit Score, warns against maxing out a single card even when overall utilisation is low. Annualised credit card interest rates are 36-48% or higher, with GST on interest and late charges causing debt to snowball. Users who carry balances may lose the interest-free period on fresh purchases, making full repayment essential to prevent long-term financial stress. Credit utilisation is calculated using the balance listed on your monthly statement, so in addition to spending less and making a bigger payment each month, you can reduce your credit utilisation by paying a credit card's bill multiple times per month.
Financial experts identify several warning signs of overleveraging that cardholders should watch for. As reported by Business Standard, repeatedly paying only the minimum amount due indicates growing dependence on credit, while carrying unpaid balances from one month to the next shows increasing credit reliance. Other warning signs include using one credit card to repay another, relying on cards for essentials after cash runs out, and feeling anxious before payment due dates. Frequently converting routine expenses into EMIs indicates repayment stress, while regularly crossing 30-40% of the available limit may signal excessive credit use. Using your credit card irresponsibly can lead to high-interest debt, late fees, and damage to your credit score, but these outcomes are easily avoidable.
