Lun. Gen 6th, 2025

Lifestyle choices, such as frequent dining out, gadget upgrades, and luxury travel, are now commonly funded through credit cards.Written by AR HemantIndian credit card usage has surged to new heights. During the Diwali season of 2024, Indians spent ₹2 trillion across 433 million transactions, with the average monthly spend per card rising to ₹18,878. This marks a sizeable increase from the ₹16,734 recorded during the 2023 Diwali month. These figures show the growing reliance on credit cards for everyday and festive purchases, driven by enticing rewards, cashback offers, and no-cost EMI schemes. However, this convenience comes at a cost. Behind the record-breaking numbers lies the worrying trend of rising credit card delinquencies and unpaid balances, financial strain for many users. For younger users, the risks are even more pronounced as spending often outpaces earnings. Let’s look into this trend and assess what novice users of credit cards must keep in mind going forward. The Rising Tide of DelinquenciesCredit card delinquencies are becoming a significant concern in India. Data from CRIF High Mark reveals that defaults in the 91-180 days past due (DPD) category climbed to 7.6% in June 2024, up from 6.5% in June 2023​. Longer-term defaults are also on the rise, with overdue balances in the 360+ days category increasing from 1.3% to 1.7% in the same period. Despite this, the credit card market continues to expand, with the number of active cards rising by over 13% to 10.6 crore in October 2024. This growth is fuelled by the popularity of rewards programmes, exclusive benefits, and the sheer convenience of cashless transactions. However, on the flipside, consumers must also be aware of the 36% interest rate because of which unpaid dues can create a debt snowball effect that can leave them financially strained. If more consumers rely on credit cards, the pattern of rising balances and delinquencies will eventually undermine the stability of our banks. Dangerous Overleveraging Among YouthYoung credit card users are increasingly using credit for non-essential purchases, often relying on EMIs to finance their spending. Lifestyle choices, such as frequent dining out, gadget upgrades, and luxury travel, are now commonly funded through credit cards. The ease of converting large purchases into EMIs often masks the true cost of these transactions. While no-cost EMIs are often offered on electronic purchases, other financing schemes will attract interest. Many users fail to account for such charges, leading to financial strain when payments start overlapping with other obligations. Revolving credit, where users pay only the minimum due, also compounds the problem. It leaves balances accruing high-interest charges month after month, turning short-term borrowing into a long-term burden.Why Timely Payments and Credit Discipline Are EssentialPaying your credit card dues on time is crucial for maintaining financial health. Not only does it prevent i 

Di