Indians are using credit cards. Are we using them well?

Most of us choose a credit card, use it for years and occasionally redeem the points. But when did you last check whether it suits the way you spend?

Credit card use in India has grown rapidly. The value of credit card payments rose from ₹6.3 lakh crore in FY2020–21 to ₹21.1 lakh crore in FY2024–25. Yet using a card often does not mean getting the best value from it.

1 Finance Magazine reviewed the spending and cards of 129 people. On average, the benefits they received through their existing cards were worth about 4% of their annual expenses. Based on their spending patterns, the study estimated that more suitable cards and effective redemption could raise that figure to about 10%.

Here is what the gap looked like across spending groups:

Why can the gap be so large?

A card’s best rewards may apply only to certain purchases or payment routes. The card you use for groceries may be better suited to travel, while another card you already hold may give you more value on everyday spending.

Then there is redemption. Points left unused provide no benefit, and the value you receive can vary depending on what you redeem them for. Annual fees, reward limits and exclusions can reduce the benefit further.

The result is easy to miss: you may be using your cards regularly without getting much back from the expenses you already have.

How a Qualified Financial Advisor help you?

A holistic financial advisor who offers credit card advisory can examine your expenses and existing cards as part of your wider financial picture. They can assess the value you receive today and whether different cards, or a simpler way of using the ones you have, would serve you better.

The aim is to get more value from spending you already planned, without making card management a second job. A review also considers whether credit cards suit your repayment habits. There is one rule that matters more than any reward: pay the full bill on time. Interest on an unpaid balance can wipe out the benefits, while spending extra to earn points does not save money.

Before applying for another card, find out whether the cards already in your wallet fit the life you lead.