Credit card defaults have climbed 28.42% to Rs 6,742 crore during the 12-month period ended December 2024, the latest Reserve Bank of India data showed.

The gross non-performing assets (NPAs) stood at Rs 5,250 crore in December 2023, representing a rise of nearly Rs 1,500 crore in a year’s time, amid a slowdown in the economy. Sin

This works out to 2.3% of the gross loan outstanding of Rs 2.92 lakh crore in the credit card segment of commercial banks in December 2024. It was 2.06% of Rs 2.53 lakh crore credit card outstanding a year ago.

Credit card NPAs have shot up by over 500% from Rs 1,108 crore as of December 2020, according to the reply to the RTI filed by The Indian Express. This has happened at a time when banks managed to bring down overall gross NPAs from Rs 5 lakh crore (2.5% of advances) in December 2023 to Rs 4.55 lakh crore (2.41%) by December 2024, the newspaper reported.

While Indian banks have succeeded in reducing NPAs, or loans defaulted by borrowers, over the past two years, a closer look reveals a significant rise in NPAs within the personal loan and credit card segments. This spike coincides with an increase in borrower indebtedness, casting a shadow over the sector’s progress, the report stated.

Credit card outstanding is unsecured in nature and carry high interest rates. A loan account becomes an NPA when the interest or principal instalment is more than 90 days overdue. When a customer delays repayment of his credit card bill beyond the billing cycle, the bank charges a high interest rate of 42-46% interest per annum on the outstanding dues and his credit score also plummets, Indian Express reported.

The value of credit card transactions has tripled in the last three years to Rs 18.31 lakh crore during the year ended March 2024, from Rs 6.30 lakh crore in March 2021. Credit card transactions were Rs 1.84 lakh crore this January, up from Rs 64,737 crore four years back. 

The issuance of credit cards by banks has jumped to 10.88 crore as of January 2025 from 9.95 crore in January 2024 and 6.10 crore in January 2021, as per RBI data.