Credit Card Debt: Credit card has become a 'loan trap', people are sweating to pay off their loans..

The number of credit cards in India is increasing day by day. People are making a lot of purchases using it, but they are also struggling to repay this loan. Credit card default (outstanding from 91 to 360 days) in the country has reached ₹ 33,886.5 crores by March 2025, which was ₹ 23,475.6 crores in March 2024. That is, there has been a 44.34% increase in defaults in one year. The increasing use of credit cards is a major reason behind the increase in credit card defaults. By March 2025, the total value of credit card transactions in the country reached ₹ 21.09 lakh crores, which was ₹ 18.31 lakh crores last year. That is, it increased by about 15% on an annual basis. In May 2025 alone, ₹1.89 lakh crore was spent through credit cards, while in January 2021, it was just ₹64,737 crore.

According to banking rules, banks consider debts older than 91 days as default. The default amount of 91-180 days alone has reached ₹29,983.6 crore, which is almost double that of March 2023. A year ago, it was ₹20,872.6 crore. It is clear from this that people are spending on credit cards, but their ability or willingness to repay on time seems to be decreasing.

The risk has been increasing for three consecutive years.

An Indian Express report states that CRIF High Mark has tracked 'Portfolio at Risk' (PAR) by analyzing the data, which shows how many percent of credit cards are not getting paid on time. The PAR of 91-180 days reached 8.2% in March 2025, which was 6.9% in March 2024 and 6.6% in 2023. At the same time, PAR in the 181-360 days category has reached 1.1%, which was 0.9% last year and 0.7% before that. That is, the default rate has been increasing continuously for three years.

Unsecured loans in danger

Experts say that these figures reflect the increasing tension in India's unsecured credit market. Especially when people are becoming dependent on credit cards for everyday and luxury expenses. According to RBI, credit card outstanding reached ₹ 2.90 lakh crore by May 2025, while it was ₹ 2.67 lakh crore in May 2024.

Tremendous jump in the number of credit cards
The number of credit cards has also increased rapidly. By May 2025, there were 11.11 crore active credit cards in India, while this number was 10.33 crore in May 2024 and only 6.10 crore in January 2021. Experts say that when people are optimistic about their economic future, they spend more by borrowing. But when salaries do not increase or inflation rises, people become dependent on credit cards to maintain their standard of living.

Why is the trend of credit cards increasing?

The strategy of banks and fintech companies is also behind this growing credit card culture. These companies have given attractive offers like cashback, travel rewards, interest-free EMI, and airport lounge access to attract customers. This has increased the attraction towards credit cards in the new generation, but along with it the pressure of debt. The rising default rates are an indication that if this trend is not controlled in time, it could pose a threat to both the health of banks and the economy.

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