Digital payments have fueled a sharp rise in credit card usage in India, with data indicating a significant increase in users over the past three years. Key reasons behind this surge include the ease of using credit cards, hassle-free transactions, simplified application processes, the convenience of not carrying cash, extended repayment windows of 45–50 days, and attractive bank offers that persuade users to opt for credit cards. However, a shocking report has surfaced, revealing a surge in defaulters. Non-performing assets (NPAs), or the amount defaulted by customers, in the credit card segment have also risen by 28.42 per cent to Rs 6,742 crore during the 12-month period ended December 2024, according to the latest Reserve Bank of India data.

Credit Card Defaulters

According to The New Indian Express report, The Reserve Bank of India (RBI) data shows a sharp increase in unpaid credit card dues, also known as gross non-performing assets (NPAs). These rose from ₹5,250 crore in December 2023 to ₹6,742 crore in December 2024 — an increase of nearly ₹1,500 crore. This spike comes at a time when the economy is facing a slowdown. Gross NPAs in the credit card segment now account for 2.3% of the total outstanding loans of ₹2.92 lakh crore with commercial banks, compared to 2.06% of ₹2.53 lakh crore the previous year. The Data was attained through RTI.

Why India’s Credit Card Boom Is Turning into a Bust

The rise in credit card NPAs comes at a time when the Indian economy has witnessed a slight slowdown. Credit card usage is growing rapidly in India, offering many benefits such as rewards, loan offers and lounge benefits. However, if you do not pay the outstanding amount even after the billing cycle, banks charge high annual interest, which can go up to 42-46%. This not only worsens your financial condition but also causes a rapid decline in your credit score.