Half of India’s first-time credit card users are now from Generation Z (GenZ), and nearly half come from semi-urban and rural markets, highlighting a shift in the country’s credit card market as younger consumers and borrowers outside metropolitan cities increasingly adopt formal credit, according to a TransUnion Cibil report.
Its latest white paper, Beyond the Swipe 2026: How India Uses Card as a Credit Instrument, showed that, as of March 2026, 50 per cent of new-to-credit card (NTCC) consumers were aged 30 years or below, up from 43 per cent in March 2022. At the same time, 46 per cent of first-time cardholders came from semi-urban and rural markets, compared with 42 per cent four years earlier.
The report observed that credit cards are no longer confined to urban, affluent borrowers, with younger consumers and those outside metropolitan centres increasingly entering the formal credit ecosystem.
India’s credit card market has expanded sharply over the past decade. The number of credit card holders rose 3.6x to 52 million in March this year from 14 million in March 2016, while the number of active credit cards increased fivefold to 107 million.
“There is a great maturity in the credit card market in India; it has seen significant growth over the past 10 years. But over the past couple of years, the credit card market has not been growing, either in terms of balances or the number of cardholders, despite credit performance improving considerably,” Bhavesh Jain, managing director and chief executive officer, TransUnion Cibil, said.
He explained that because credit cards compete with personal loans, loans for consumer durables and other retail lending products, those segments have grown much faster than credit cards.
The report said that as the credit card market expanded over the past 10 years, cardholders also began carrying a wider mix of credit products. Active credit cards accounted for 56 per cent of consumption-led credit accounts in March 2016, down to 38 per cent this year. Card balances as a share of consumption-led credit balances in the industry also declined from 36 per cent to 26 per cent over the same period.
Outstanding credit card balances grew at an even faster pace, rising 8.3x to ₹3.1 trillion from nearly ₹40,000 crore over the same period. The average outstanding balance per consumer also more than doubled to ₹65,000 from ₹31,000, reflecting higher card usage.
Despite the rapid growth, India’s credit card penetration remains relatively low. Only 25 per cent of credit-active consumers held a credit card as of March this year, compared with 62 per cent in Colombia, 70 per cent in the UK, and 98 per cent in Hong Kong, suggesting significant headroom for expansion.
The report also found that many first-time card users are no longer entering the formal credit system through credit cards alone. About 25 per cent of NTCC consumers already had three or more active credit products when they obtained their first credit card, indicating that cards are increasingly being added to an existing credit portfolio rather than serving as a consumer’s first formal borrowing product.
Among younger borrowers, the trend is even more pronounced. Nearly one-third of GenZ 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. GenZ borrowers were also more likely to hold loans for consumer durables and small-ticket personal loans before receiving their first card.
Early card usage among GenZ was stronger than among previous cohorts. Around 28 per cent accumulated balances exceeding ₹25,000 within three months of receiving their first credit card, compared with about 20 per cent of millennials in 2018. Nearly 69 per cent of GenZ first-time cardholders also took another credit product within a year of getting their first card, compared with 55 per cent of millennials.