The Future Of Credit Card Usage

Credit card usage is increasing in India, but it's prudent to manage credit wisely

- ADHIL SHETTY

The last few weeks saw some frenetic action in the credit card space. In February 2024, India went past the milestone of 100 million cards in force. In March, the Reserve Bank of India (RBI) issued wide-ranging instructions pertaining to how cards can be issued or used. But soon, concerns were raised about aspects, such as non-performing assets (NPAs), co-branded cards, and reward devaluation. Here’s breaking down the key changes to understand the takeaways for consumers.

Growing Too Fast? In February 2020, there were 57 million credit cards in force. This has grown at 15 per cent annually, with concerns being expressed about the speed. The US, with about 1.1 billion credit cards and dues totalling $1.1 trillion, contrasts sharply with India’s 100 million cards and dues of $32 billion (₹2.6 trillion). Clearly, there’s potential for expansion in India, where only 3-4 per cent of the population owns credit cards, and per capita spend is just $23 compared to the US’s $3,200. India’s GDP per capita is also $2,600 compared to the US’s $83,000. So, the only way is up—and fast.