Credit card boom accompanied by delinquencies, borrower stress and multiple unsecured loans: CIBIL

India’s decade-long credit card boom is beginning to enter a more challenging phase. As millions of consumers embrace easy access to unsecured credit, rising delinquencies, increased borrowing across multiple loan products and emerging “pockets of stress” are pointing to evolving challenges for lenders and borrowers alike, according to a TransUnion CIBIL report.

While the industry has celebrated a sharp rise in credit card issuances — from 1.4 crore to 5.2 crore in ten years — and spending, the report says consumers are likely to hold multiple credit cards and multiple unsecured products in their wallet, creating “distinct growth and risk opportunities for card issuers to manage effectively”.

This is at a time when consumers juggle multiple card and credit products and younger borrowers enter the market with more aggressive borrowing habits.

Outstanding credit card balances have surged more than eight-fold over the past decade to Rs 3.1 lakh crore, but the rapid expansion has also coincided with a deterioration in asset quality since 2022.

After a period of improving repayment behaviour before the pandemic (2016 to 2020), delinquency levels have begun rising again as unsecured lending accelerated across the financial system.

“Since 2022, as growth resumed, the system witnessed a rise in delinquencies alongside stabilisation in balances, indicating ‘pockets of stress’ emerging within a rapidly expanding unsecured ecosystem,” said CIBIL, a credit information company registered with the RBI, in its white paper on credit cards.

Delinquency level in 180 dpd (days past due) category since 2022 has gone up from 5.8% to 8.1% in March 2026.

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A significant shift is that credit cards no longer operate in isolation.

“Cards are now part of a broader unsecured credit landscape. The share of open credit cards within unsecured credit products has declined over time, from 56% in 2016 to 38% in 2026,” said CIBIL.

Card issuers are now “increasingly competing with small-ticket personal loans — loans below Rs 50,000 — and consumer durable loans for lifestyle financing by consumers.”

Consumers are increasingly using several credit products simultaneously rather than relying primarily on credit cards.

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“Credit card consumers are more likely to hold multiple credit cards and multiple unsecured products in their wallet as compared to the last decade. The share of consumers holding other consumption-led credit in their wallet has doubled from 16% to 32% in the last decade,” CIBIL said.

CIBIL said the share of consumers with three or more cards in their wallet has increased from 12% to 22% during the same period.

This growing overlap of products creates competing repayment obligations and makes it harder for lenders to assess borrower risk using a single product in isolation.

High exposure users

Another worry is the emergence of “high exposure users,” who account for around 10% of cardholders. High exposure users are known for high utilisation, use multiple unsecured credit products and have higher exposure to risk across wallets, it said.

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Consumers in this segment who missed two or more repayments across products were substantially more likely to become seriously delinquent on their credit cards than other customer groups.

Delinquency worsens as highly leveraged borrowers gain more credit experience.

“Diversified credit users with 4 plus years of card experience have 40 to 60 bps higher delinquencies than the overall delinquency for the persona,” CIBIL said.

Borrowers with multiple personal loans accumulated over recent years are particularly vulnerable.

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“22% of consumers with 4 years plus card experience have opened more than three personal loans in the last 24 months and have delinquency of 8.7%,” CIBIL said.

Another highlight is the behaviour of younger borrowers.

Gen Z consumers (those born between 1995 and 2010) opened new unsecured loans post first card at a higher rate compared to millennials (those born between 1980 and 1994), it said, adding that Gen Z consumers are entering the credit card ecosystem with more existing loans than millennials did at the same age.

CIBIL said borrowers with consumer durables and high-ticket personal loans (HTPL) in their wallet need close monitoring for competing payment priorities.

Another notable trend is that consumers today do not rely solely on credit cards for borrowing.

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“The share of consumers who hold only a credit card as their unsecured credit product has declined from 50% to 33% over the same period. This indicates that sources of credit have become more diversified and complex,” said Bhavesh Jain MD & CEO, TransUnion CIBIL.

The next phase of growth will be driven by the next generation of consumers.

These consumers are now entering the cards ecosystem with more active borrowing behaviour as compared to the same age group a decade ago. Their early trajectory of card usage, credit expansion and payment prioritisation will determine both lifetime value and systemic risk.