India Credit Trends: Low Card Use Amid Rising Delinquencies

Despite significant growth in absolute numbers, India's credit card penetration remains at approximately 25% of the credit-active population, trailing behind international benchmarks like the U.S. and Colombia. Between March 2016 and March 2026, the volume of cardholders expanded to 5.2 crore, and outstanding balances surged to ₹3.1 lakh crore. However, UPI's dominance and the rise of small-ticket personal loans have repositioned credit cards as less central in the unsecured credit ecosystem.

Data from a TransUnion CIBIL report indicates a rise in delinquency rates, which grew from 5.8% to 8.1% by March 2026 for accounts 180 days past due. This stress is particularly evident among younger borrowers and those juggling multiple unsecured credit products. The findings suggest that consumers who manage three or more loans simultaneously face higher delinquency risks, pointing to pockets of instability in the current retail credit landscape.

In contrast, the NBFC sector is witnessing a surge in gold-backed loans, which rose 69.9% year-on-year to reach ₹3.29 lakh crore in May 2026. This expansion significantly outpaces total retail loan growth. Meanwhile, in the corporate space, PC Jeweller is executing a debt-free turnaround, having repaid outstanding dues to two consortium banks. This marks a meaningful step in the company's financial recovery strategy as it aims for full debt liquidation in the coming quarter.