From EMIs To UPI: Major Trends Driving Credit Card Usage In India

Slowly but surely, credit cards are making a space for themselves in Indian consumers’ everyday spending. Be it grocery shopping, flight booking, ordering food online, filling fuel in cars or buying electronics on EMI – consumers are leveraging credit cards for their day-to-day requirements, for the convenience/rewards they provide, flexibility or better spend control.

Not only is this trend being witnessed in metro cities, but it is also percolating into small towns as digital payments and UPI-based transactions have gained significant traction in the country over the past few years. Additionally, a younger consumer base, rising incomes and an increasing propensity to spend on lifestyle and experience-driven purchases are fuelling the trend further.

UPI-linked credit cards and category-specific rewards are also playing a role in changing consumers’ credit habits. Consumers today often use different cards for different needs - from travel and shopping to fuel and dining - depending on the rewards and offers available.

According to SBI Card’s FY’26 data, India had around 118.6 million credit cards in circulation, while total credit card spends crossed Rs 23.62 trillion during the year. The numbers reflect how the market is now moving beyond just issuing more cards to encouraging more frequent and wider usage in everyday spending.

Transformational Shift In Customer Experience: Digital-first Consumption

Evolving Customer Behaviour: Supported by increasing incomes and exposure, Indian customers’ spending behaviour is rapidly becoming aspirational as well as experience-driven, placing greater emphasis on customers’ discretionary spending ability. Data shared by SBI Card reveals that retail spends clocked all-time highs of over Rs 3.54 trillion, registering a growth of 15 per cent on a YoY basis. Further, nearly 62.5 per cent of the retail spends were met by online spends, reinforcing the digital-first mindset across non-discretionary as well as discretionary spends.

Hyper-personalised, seamless and convenient experiences powered by self-service-led digital platforms are increasingly shaping customer engagement with brands.

Speaking on the future of the credit card landscape in India, Salila Pande, MD & CEO, SBI Card, said, “Indian customers’ spend behaviour is witnessing a meaningful shift with rising income levels and aspirations, aided by progressive policies towards digitisation and expanding payments infrastructure. Customers today are looking beyond basic transactions and are spending on experiences, lifestyle-led purchases, and seamless everyday spends. This demonstrates the growing confidence in the mindset of the modern Indian consumer.”

UPI Usage On Credit Cards Grows For Daily Needs Purchases

India’s rapidly expanding digital payments landscape has witnessed the emergence of UPI as a dominant force, fueling daily spending. One of the key trends shaping the broader UPI landscape is the increased use of UPI-linked credit cards, driving further growth in its share of the pie for daily spends. According to SBI Card data, spending on UPI-linked credit cards recorded a QoQ growth of over 10 per cent, led by departmental stores and groceries, utilities & fuel, apparel, and restaurants - signalling increased comfort and trust among customers.

UPI Adoption On Credit Cards Is Gaining Traction in Tier 2+ cities

Credit cards are now seeing improved penetration in non-metros, aided by rising incomes, higher digital literacy and increased payment infrastructure. The benefits of RuPay credit cards being linked to UPI are helping drive higher credit card adoption in smaller cities, as well as allowing customers to transact using credit effortlessly, even for daily spends such as small ticket purchases.

UPI transactions from credit cards represented 77 per cent of all active UPI credit customers and 81 per cent of total UPI-linked credit spends for SBI Card originating from Tier 3 & Tier 3 cities, which reinforces strong digital credit adoption in these markets and how credit cards are playing an important role in driving financial inclusion.

EMIs Driving Purchases On Credit Cards

Credit card EMIs posted a healthy double-digit growth on a yearly basis. The popularity of EMI-based transactions can be attributed to the fact that it allows customers to make payments towards gadgets, electronics, etc., in an affordable and convenient manner. Furthermore, the trend of availing EMIs for large ticket purchases is gradually gaining popularity in non-metros within Tier 2+ cities, indicating greater credit penetration and a change in consumer spending behaviour.