India’s credit and charge card payments market is entering a phase of sustained growth, poised to cross ₹25.91 lakh crore (US$ 300 billion) in transaction value in 2025, according to a recent report by GlobalData. This represents a 14% year-on-year growth, signalling a robust shift in consumer preferences toward non-cash payment methods amid rising income levels and a digitally empowered financial ecosystem.

In 2024, India’s credit and charge card transaction value grew by a solid 15.3%, laying the groundwork for continued expansion in the upcoming fiscal year. The transformation is largely attributed to a mix of consumer behaviour, digital innovation, promotional banking offers, and increased acceptance of card payments across retail and online merchants.

Dominance of Credit Cards in Transaction Value

While credit and charge cards have a lower penetration rate than debit cards in India, they accounted for 81% of total payment card transaction value in 2024, a clear reflection of their high usage frequency and larger ticket size. The average usage frequency is expected to rise to 54.2 times per user annually in 2025.

This data confirms that credit cards are more than a convenience tool—they are becoming a preferred mode of payment, especially for high-value purchases and e-commerce transactions. The report noted that 11.2% of total online payment value in 2024 was attributed to credit card usage, pointing to their growing importance in India’s digital retail landscape.

Consumer-Centric Features Fueling Growth

The popularity of credit cards in India is also being reinforced by value-added features that provide tangible benefits to users:

• Cashback offers on spending categories such as groceries, fuel, and travel

• Exclusive merchant discounts and partner deals

• No-cost EMI options for online and offline purchases

• Reward points and travel benefits

These offerings make credit and charge cards an integral part of Indian consumers' financial strategies, especially among millennials and salaried professionals who seek both convenience and returns on their spending.

June Dip and Seasonal Outlook

Interestingly, June 2025 saw a 3.6% decline in credit card spending compared to the previous month, bringing total transaction value down to ₹1.83 lakh crore (US$ 21.18 billion). However, market experts and financial institutions view this dip as temporary, citing seasonal shifts and cyclical spending patterns.

Looking ahead, festive season demand in Q3 and Q4 of FY26, coupled with reviving consumption trends, is expected to propel card usage further. Factors such as bonus payouts, holiday travel, big-ticket purchases, and e-commerce festival sales are likely to provide the necessary thrust to credit card spending in the second half of the fiscal year.

Strategic Shift in Lender Priorities

As India’s credit card ecosystem matures, financial institutions are realigning their strategies. According to IDBI Capital, banks and non-banking financial companies (NBFCs) are increasingly focusing on:

• Credit quality over acquisition volumes

• Cross-selling products to existing, reliable customers

• Improving profitability per card issued

This shift is indicative of a more risk-conscious lending environment, where default control and customer lifetime value take precedence over expanding user base rapidly.

Card Base and Penetration Growth

As of May 2025, India had 111.2 million credit and charge cards in force, reflecting a 7% year-on-year growth. While this figure is impressive, it still suggests ample headroom for expansion, particularly in tier-2 and tier-3 cities, where card penetration remains relatively low but digital adoption is rising fast.

The rural and semi-urban markets, supported by government-led digitisation drives, better internet connectivity, and an increasing young workforce, are expected to play a crucial role in deepening card usage in the years to come.

Future Growth Projections: A Promising Outlook

The credit and charge card segment is projected to grow at a compound annual growth rate (CAGR) of 11.5% from 2025 to 2029, reaching a transaction value of ₹39.3 lakh crore (US$ 454.91 billion) by the end of 2029.

This long-term growth trajectory is anchored in several key trends:

1. Rapid digitalisation of financial services and merchant infrastructure

2. Enhanced data analytics by issuers for better targeting and credit underwriting

3. Consumer awareness of credit benefits such as EMI, rewards, and protection

4. Integration with UPI and tap-to-pay functionalities

With regulatory support from the Reserve Bank of India (RBI), including interoperable payment systems, enhanced customer protection, and innovation in card-linked platforms, the ecosystem is primed for sustained momentum.

Role of E-commerce and Fintech Ecosystems

India’s thriving e-commerce ecosystem, with giants like Amazon, Flipkart, and Myntra, along with digital-first brands, are heavily reliant on credit and charge cards for customer payments. Many of these platforms offer exclusive discounts and no-cost EMI schemes tied to particular credit card issuers, increasing the attractiveness and adoption of cards.

In addition, fintech platforms such as CRED, Slice, Uni, and OneCard are expanding access to credit-like features for younger, digitally savvy consumers. These new-age credit solutions, often operating in tandem with traditional banks, are democratising access to personalised credit cards, driving greater volumes and engagement.

Conclusion

The Indian credit and charge card market is on the brink of a major growth phase, backed by strong consumer appetite, technological evolution, and financial sector innovation. With projections estimating the market to reach ₹25.91 lakh crore (US$ 300 billion) in 2025 and expand further to ₹39.3 lakh crore (US$ 454.91 billion) by 2029, the opportunity ahead is immense.

This momentum is a reflection of the changing financial landscape in India, where cards are evolving from being just a payment tool to a value-delivery platform offering convenience, rewards, and affordability.

For financial institutions, this growth mandates a balanced approach—ensuring prudent risk management, expansion into underserved markets, and digital-first user experiences. For consumers, the continued evolution promises more choices, benefits, and flexibility in how they manage their everyday payments.

As India moves further toward a cash-light economy, credit and charge cards will remain a key pillar in the digital payments ecosystem, shaping the next chapter of financial inclusion and economic dynamism.

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