8 july 2026 Punjab Khabarnama Bureau : India’s credit card market continues to have significant growth potential, with penetration remaining relatively low despite notable improvements in asset quality and repayment behaviour, according to a report by CIBIL. The findings suggest that while more consumers are using formal credit, a large section of the population still remains outside the credit card ecosystem.
The report highlights that improving credit discipline and better asset quality have strengthened confidence among lenders, creating opportunities for responsible expansion of credit card services across the country.
Low Credit Card Penetration
According to CIBIL, India’s credit card penetration remains modest compared with many developed and emerging economies. A majority of eligible consumers still rely on debit cards, cash transactions, or alternative forms of credit rather than credit cards.
Financial experts believe this presents considerable room for growth as digital payments continue to expand and financial inclusion improves.
Asset Quality Continues to Improve
One of the report’s key findings is the improvement in asset quality within the credit card segment. Better repayment patterns, lower delinquency rates, and enhanced risk management by financial institutions have contributed to healthier credit portfolios.
Banks and non-banking financial companies (NBFCs) have also adopted more data-driven lending practices, helping them identify creditworthy borrowers while reducing the risk of defaults.
Digital Payments Driving Growth
The increasing adoption of digital payments, e-commerce, and online banking has encouraged more consumers to consider credit cards for everyday spending. Contactless payments, reward programmes, cashback offers, and easy EMI options have further boosted customer interest.
However, experts note that awareness, financial literacy, and access to formal banking services remain key challenges in expanding credit card usage across rural and semi-urban regions.
Opportunities for Financial Institutions
CIBIL believes lenders have significant opportunities to grow the credit card market by targeting underserved customer segments, including first-time borrowers and individuals with limited credit histories.
The use of advanced analytics and alternative credit assessment tools is expected to help banks safely expand lending while maintaining healthy portfolio quality.
Need for Responsible Credit Use
Industry experts stress that while expanding access to credit cards can support economic growth and consumer spending, responsible borrowing remains essential.
Cardholders are encouraged to pay dues on time, avoid excessive borrowing, maintain healthy credit utilisation, and regularly monitor their credit scores to preserve strong financial health.
Positive Outlook for the Sector
With India’s growing middle class, rising digital adoption, and improving financial infrastructure, analysts expect the credit card industry to continue expanding over the coming years.
The report suggests that improved asset quality, combined with cautious lending practices and increasing consumer awareness, could support sustainable growth in the sector while strengthening the country’s overall credit ecosystem.