Explore how to effectively use credit cards to maximize rewards and benefits, while understanding the evolving landscape of credit card usage in India.
New Delhi, India Jul 27, 2026 ALN: If you’ve been using credit cards for a while, you probably noticed how dramatically the landscape has changed. Ten years ago, a credit card was often your first formal credit product. Today, for many consumers, it is just one of several ways to borrow money. The evolution of credit cards mirrors the broader trends in consumer finance, where digital transformation and changing consumer preferences have reshaped how individuals manage their finances.
A new TransUnion CIBIL whitepaper, ‘Beyond the Swipe’, captures this evolution well. While India’s credit card ecosystem has expanded rapidly—with outstanding balances growing from Rs.0.4 lakh crore to Rs.3.1 lakh crore and the number of cardholders up from 1.4 crore to 5.2 crore over the past decade—the more interesting story is how Indians are actually using their cards today. For those who obsess over airline miles, hotel points, and cashback, these trends matter because banks are increasingly designing products around changing consumer behaviour. Understanding these shifts is essential for consumers looking to maximize their rewards.
The report points out that the credit card business is no longer primarily about issuing cards to first-time users. Instead, issuers are fighting to become the “top-of-wallet” card for customers who already own multiple cards. In fact, 22% of consumers now hold three or more credit cards—almost double the number a decade ago. This increase in card ownership reflects a more competitive market where consumers are presented with a plethora of options, compelling them to choose cards that offer the best rewards and benefits.
At the same time, nearly one-third of cardholders also carry other unsecured borrowing, such as personal loans or consumer durable loans. This trend indicates a shift in how consumers perceive credit. Instead of merely a means of payment, credit cards are increasingly viewed as tools for managing cash flow and financing purchases. This evolution has led to a more complex relationship between consumers and credit, where the potential for rewards must be balanced against the risks of accruing debt.
This explains why almost every premium card launched over the past few years has focused heavily on travel. Lounge access, airline miles, hotel elite status, airport transfers, and accelerated rewards are no longer fringe benefits. They are tools banks use to convince customers to choose one card over another for their everyday spending. As competition intensifies, issuers are incentivizing consumers to use their cards for a broader range of transactions, which ultimately benefits both parties if managed wisely.
For travellers, this has created unprecedented opportunity. A decade ago, earning enough miles for a premium cabin redemption often required significant business travel. Today, regular household spending, insurance payments, online shopping, and even utility bills can translate into airline and hotel rewards if routed through the right card ecosystem. This flexibility allows consumers to earn rewards on expenditures that were previously not eligible for such benefits, enhancing the overall value of credit card usage.
However, the report also highlights a less obvious trend. Credit cards are increasingly competing with small-ticket personal loans and consumer financing products rather than simply replacing cash. In other words, cards are becoming financing instruments as much as payment instruments. That’s an important distinction. Consumers must be aware of how they are using their cards; the allure of rewards can some overshadow the potential pitfalls of high-interest debt.
If you’re using your card primarily to maximise rewards while paying your bill in full every month, you’re effectively being subsidised by the issuer’s broader lending business. But if you start revolving balances or converting routine expenses into long-term equated monthly instalments (EMIs) simply to earn a few extra reward points, the maths quickly works against you. The interest accrued on unpaid balances can easily negate any rewards earned, making it crucial for consumers to adopt a disciplined approach to credit card usage.
The report identifies a growing segment of “card-centric users” who rely on credit cards for short-term liquidity and financing, as well as another group with high utilisation across multiple unsecured products. While these consumers naturally generate more revenue for banks, they also carry higher credit risk. This trend raises questions about financial literacy and the importance of understanding the implications of credit usage. Consumers must navigate these complexities carefully to avoid falling into debt traps.
For financially disciplined consumers, there is another takeaway. Now, banks increasingly reward engagement rather than ownership. Simply holding a premium card is rarely enough: issuers want it to become your preferred spending instrument, because that determines whether they earn interchange income, interest, or merchant partnerships. That’s one reason why targeted offers, bonus reward campaigns, and accelerated earning opportunities exist throughout the year. The competitive landscape compels issuers to continuously innovate and offer attractive incentives to retain customer loyalty.
Interestingly, despite all the growth, India remains remarkably under-penetrated. Only about one in four credit-active consumers has a credit card, far below mature markets such as the United States, Canada, or the United Kingdom. This suggests the industry’s growth story is far from over. The potential for expansion indicates that more consumers may soon enter the credit card market, further intensifying competition among issuers and leading to even more attractive offerings.
For travellers, this is likely to translate into even stronger competition among banks over the next few years. More cobranded airline cards, richer hotel partnerships, flexible reward currencies, and premium travel benefits are likely, as issuers compete for affluent customers who already have multiple cards in their wallets. This environment will encourage innovation in product offerings, which can enhance the overall consumer experience.
The challenge for consumers is to avoid confusing better rewards with better financial decisions. A free business-class ticket earned by planned spending is genuinely valuable. Paying interest at 40% per year to earn the same miles is not. The smartest card user of the next decade won’t necessarily be the one having the most plastic. It’ll be the one who understands that the real value lies in using credit strategically, paying every bill in full, and letting rewards do the work—not the other way around. This strategic mindset can help consumers maximize their rewards without incurring unnecessary debt.
As the credit card landscape continues to evolve, consumers must stay informed about the latest trends, offerings, and best practices. Understanding the nuances of credit card usage and the implications of different financial products is essential for making informed decisions that align with individual financial goals. By mastering the art of strategic credit card usage, consumers can unlock the full potential of their spending power while minimizing the risks associated with credit.
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