India’s credit card market has expanded sharply over the past decade, but is yet to touch its potential, with only !According to a report by TransUnion CIBIL, credit cards continue to have limited reach, with only one in four credit-active consumers holding one.The credit information company’s managing director and chief executive, Bhavesh Jain, said that India currently has 5.2 crore credit card holders out of an overall credit-active population of around 25 crore. He added that the usage is lower than in several developing and developed markets despite improving delinquency levels and other favourable factors.According to the company, credit card penetration is 62% in Columbia, 70% in the UK, 81% in the USA and 98% in Hong Kong. In contrast, the number stands at 25% in India.The report also found that credit cards are contributing less towards expanding the country’s formal credit ecosystem. New-to-credit customers accounted for only 8% of fresh credit card additions, down from 26% a year ago, Jain said.Over the years, credit cards have also lost their position as the dominant unsecured credit product in consumers’ wallets. The white paper said they now compete with alternatives such as Unified Payments Interface (UPI) and personal loans.At present, credit card transactions attract a merchant discount rate of up to 2%, while users receive benefits such as reward points. However, users can currently add only state-promoted RuPay credit cards to UPI apps, while cards issued on other networks such as Visa and Mastercard are not supported.The report highlighted significant growth in the industry over the past decade. Outstanding credit card balances have increased 8.3 times to Rs 3.1 lakh crore, while the number of credit card holders has risen 3.6 times to 5.2 crore.During the same period, the number of credit cards in circulation has grown 5.1 times to 10.7 crore.Consumer behaviour has also changed. The share of people carrying three or more credit cards has increased from 12% a decade ago to 22%, while the share of live credit cards in consumption loans has fallen from 56% to 38%.Jain said younger consumers continue to have a higher likelihood of owning credit cards. He also noted that credit card ownership is no longer confined to metropolitan cities and has spread to semi-urban and rural areas.On portfolio quality, the white paper said the deterioration seen during the Covid-19 pandemic has now passed. Credit card outstandings overdue by 91 to 179 days declined to 1.7% in the year ended March 2026, compared with 2% a year earlier, indicating an improvement in broader portfolio quality.