Everyone Around You Is Using Credit Cards: Top Uses and Tips

This article explains the key credit card trends of 2025 in India, including how credit cards are being used increasingly for online shopping, travel rewards, co-branded partnerships, UPI integration, and regulatory changes. 

It explores how Indians are spending using credit cards, what categories are seeing the highest growth, and what emerging trends consumers should watch for in 2026. Credit cards are no longer just a payment instrument, they are now tools for rewards, lifestyle benefits, travel perks, and financial accessibility.

Credit Cards 2025: A Turning Point

In 2025, India’s credit card market has seen a major transformation, driven by record high spends, strong consumer demand, and innovative product features. In September 2025, credit card transactions in India hit an all-time high, both in value (over ₹2.17 trillion) and in transaction count, despite a slowdown in the issuance of new additional cards.

Part of this boom is that online shopping has become the dominant segment for credit card use. In late 2025, e-commerce accounted for more than 60 % of total credit card spend value, with September reporting over 66 % of credit card spend coming from online transactions.

Meanwhile, the share of in-store point-of-sale (POS) transactions has slipped below 35 %, underlining a clear shift in consumer behaviour toward digital purchases.

This transition reflects not only changing consumer patterns but also product innovations by banks and financial institutions, from UPI-linked credit cards to airline rewards and co-branded partnerships, reshaping the way Indians think about spending, savings and lifestyle perks.

Online Shopping and E-Commerce Remain Dominant

The most notable trend in 2025 has been the continued surge in online shopping via credit cards. Ecommerce platforms and digital marketplaces have become the largest category for credit card billing, far outpacing traditional retail swipes.

The following table summarises how different categories of credit card spend have performed during parts of 2025, according to SBI Research and Upstox coverage of festival season data (Sep-Oct 2025):

Credit Card Spend Growth by Category (Sep-Oct 2025 vs Sep-Oct 2024)

Below is a high-level view of how different spend categories changed during the 2025 festive period:
 

SBI Research aggregated by Upstox reporting

These figures show an evolving credit card payment landscape, travel agents, railways and education categories are surging, while traditional categories like rental payments and some retail segments have declined or stagnated. 

The dominance of digital and planned spends is clear, signalling that credit cards are increasingly used for larger, purposeful purchases instead of small, incidental spends.

Co-Branded Credit Cards: Tailored Rewards Beyond Banking

2025 saw strong momentum for co-branded credit cards, which are issued in collaboration between banks and digital brands, travel companies, and e-commerce platforms. Co-branded cards are designed to deliver enhanced rewards specific to a partner ecosystem, such as airlines, shopping platforms, or digital wallets.

Notable examples include:

• PhonePe and HDFC Bank’s RuPay co-branded card with high UPI reward potential
• IDFC FIRST Bank’s collaboration with IndiGo for airline reward credits
• Various cards from SBI Card with partners like Tata Neu, Flipkart, PhonePe offering category-based rewards.

These co-branded offerings help issuers expand their user base and allow consumers to earn higher rewards within specific spending categories, especially travel and online shopping, boosting retention and usage.

UPI Integration & Payment Innovations

Another trend enhancing the relevance of credit cards is UPI integration, especially for RuPay credit cards. UPI linkage allows users to pay via QR codes or apps with their credit card balance, democratizing credit usage even where POS machines are limited. 

This innovation is especially impactful in Tier-II/III cities, bringing credit to small merchants and everyday QR payment scenarios.

Additionally, banks are introducing more contactless, biometric and AI-assisted security features on credit cards to combat fraud and improve convenience. Wearable payment options and secure device-native authentication are expected to grow further in 2026.

Focus on Travel, Airline & Lifestyle Rewards

Travel remains a chief driver for high-value credit card usage. In 2025:

• Credit card companies have emphasised airline miles and travel rewards, partnering with airlines and hotel chains.
• Lounge access, travel insurance, and bonus miles are now common perks on premium cards.
• Surveys highlight that almost 80 % of Indians plan to redeem reward points for leisure travel, not just flights but hotels, car rentals and experiences.

This shift shows that credit cards are no longer confined to financing purchases but are becoming lifestyle tools for travel planning, often replacing standalone loyalty programs.

Rising Consumer Spending and Seasonal Peaks

Credit card spending spiked significantly during festive seasons. On Diwali 2025 alone, the number of credit card transactions crossed 1.23 crore in a day, with a combined transaction value nearing ₹7,328 crore. This demonstrates how credit cards have become an intrinsic part of festive purchases, travel bookings, and online shopping.

Consumers are quickly leveraging rewards, EMI offers, and category-specific cashback to manage larger spends and maximize value.

What to Watch for in 2026

The Upstox article and wider industry signals suggest several big trends to monitor in the coming year:

• Expansion of co-brand partnerships: More targeted reward cards are expected.
• Tighter security & 2-factor authentication for online transactions: RBI has mandated stronger authentication norms, coming into effect April 1, 2026, for all card transactions to improve safety.
• Higher UPI integration: Greater use of credit via QR and UPI will expand reach. 
• Consumers comparing interest, fees & rewards more carefully: With cards now embedded into everyday financial planning, users will focus on total cost of ownership and utility when choosing cards.

Conclusion

The credit card market in India in 2025 has reached a pivotal stage, blending digital innovation, consumer behaviour shifts and strategic reward structures. With online shopping financing the majority of spends, travel and co-brand rewards in high demand, and UPI integration making cards more accessible, cards have evolved into powerful tools for both everyday and lifestyle spending.

As we head into 2026, expect more tailored products, stronger authentication measures, deeper co-brand collaborations and continued growth in digital credit usage — but also a more discerning consumer who understands fees, reward economics and secure payments.

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