India Business Journal - Personal loans, other products beat credit cards in share of consumption spending

MONEY

Personal loans, other products beat credit cards in share of consumption spending

IBJ Bureau
Jul 09, 2026

Credit cards are losing ground to personal loans and other consumption-credit products.

A new research report by TransUnion CIBIL notes that lower credit card sales are because of banks preferring customers with higher balances instead of playing the volume game.

The CIBIL report, titled Beyond The Swipe, adds that the share of credit cards in the unsecured loan market has fallen to 38 per cent in 2026 from 56 per cent in 2016.

That space is now taken over by small-ticket personal loans of Rs 50,000 or less.

“Issuers (banks) are no longer competing for just new consumers; they are competing for higher balances and priority within the wallet of the same consumer,” the report points out.

On the digital payment and accessibility side, credit cards are facing competition from Unified Payments Interface (UPI).

Credit cards are no more the dominant unsecured product in wallet, as they face increasing competition within the same consumption-driven small credit space rather than operate as a default option.

According to the report, the share of card balance in consumer wallet for consumption credit has decreased to 26 per cent in March 2026 from 36 per cent in March 2016.

While the number of credit card consumers has jumped from 1.4 crore to 5.2 crore, outstanding balances have expanded from 0.4 lakh crore to Rs 3.1 lakh crore.