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Tata Capital > Blog > Personal Use Loan > Use of Credit Card in India: A Journey

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Use of Credit Card in India: A Journey

Use of Credit Card in India: A Journey

Today credit cards are everywhere, flooding wallets across the globe. One does not even consider them a novelty item when they swap or tap their cards to pay for their shopping. But credit cards weren’t always plastic cards that made payments with a tap on a POS machine.

Credit cards have been around for over 70 years in one form or the other. First introduced as a piece of cardboard, credit cards are now contactless. But ever since their inception, credit cards have transformed the global economy, and India isn’t untouched by them either.

In this blog, we will look back at the use of credit cards in India. We will explore how and when they arrived in the country. But before moving forward to the evolution of credit cards in India, let's trace back their original roots.

Tracing the modern credit card history

Modern credit cards have a fascinating story. Like most inventions, it was an individual’s quest to solve a problem once and for all. We can trace back the genesis to the moment in 1949 when a man forgot his wallet at home.

In 1949, Frank McNamara, a New York City businessman, was at New York City's famous restaurant Major's Cabin Grill. He forgot his wallet at home and couldn't pay the bill. Luckily, his wife saved him and paid the bill. McNamara determined never to face this embarrassment again, got the idea of a first credit card.

He, along with Ralph Schneider, founded the Diner’s Club, the world’s first credit card. The Diner's Club began with cardboard cards for a few selected men at 27 restaurants. Although Diner’s Club credit cards were elite, they were tailored with cardboard.

But then came the era of credit cards as we know them today, and all sorts of plastic credit cards flooded the world.

To its credit, American Express introduced the first plastic credit card in 1959, followed by Bank of America, Carte Blanche, Diner's Club, and other new credit card firms. Then, in 1969, IBM engineer Forrest Parry devised the modern magnetic strip that could be attached to a plastic card.

As imprinting got replaced by magnetic strips, credit cards with computer chips are replacing magnetic stripes. Embedded computer chips, known as EMV smart chips, enable encrypted, two-way authentication between a merchant's credit card terminal and the payment processing network. They created trust and reliability among credit card users.

History of use of credit card in India

The introduction of credit cards in India was the beginning of a new era which changed the face of the Indian economy completely. Kali Mody was the first businessman from India to introduce the Diners Club credit card in India in 1961, a year after it was initially made available globally. Later, the Central Bank of India issued the first bank credit card in 1980.

But Andhra Bank was the one which aroused the public interest in credit cards with its Visa cards. To compete with the growing popularity of Visa cards, Vijaya Bank introduced Mastercard and became the first bank in India to do so.

Even back then, it was not easy to qualify for a credit card in India unless your income lies within the annual minimum capacity. But, between 1988 and 1993, against the constraints, multiple PSU banks took the bold step of giving credit cards to many of their selected clients.

Future of credit cards in India

Credit card acceptance in India was initially in the dark shadow, which slowly started to soar over time. People have started showing interest in credit cards as they were offered more benefits than debit cards. Also, the growing financial literacy among the youth is driving this change.

Approximately Rs 6 lakh crore was spent in 2018-19 using credit cards in India, which was 30% more than in 2017. However, due to the COVID-19 pandemic, credit card transactions fell drastically from March to May 2020.

But, as the economy got back on track, credit card usage increased. According to the stats, the use of credit cards in India has been estimated for more than 6.78 lakh ATM transactions and approx. 12.1 crore POS transactions in June 2022.

The popularity of credit cards in the mainstream Indian population is gradually increasing. It is predicted to rise continuously by 2.6 million cards between 2023 and 2028. The forecast shows there will be approx. 45.3 million cards in use in 2028.

Another reason why the use of credit cards is increasing is the sheer number of issuers in the country. Today, one is not restricted to only banks to get a credit card. Currently, NBFCs are gaining popularity by providing credit on e-commerce and other platforms to customers with perfectly tailored no-cost or low-cost EMI options.

Besides, there is a wave of fin-tech startups onboarding younger clients into the credit card ecosystem. They rely on tech and mobile apps to make credit convenient and offer tons of rewards to users.


A credit card in India has historically been viewed as a debt trap tool due to cultural restrictions and a lack of financial awareness. However, the young generation is firmly committed to altering this paradigm by raising knowledge that they understand the practicality of using a credit card in India. They use their cards for daily purchases, online shopping, and bulk payments.

Traditionally, the Indian credit industry was mostly traditional banking oriented. But now, NBFCs are changing the scenario with new innovative products and initiatives, offers, rewards, low interest and processing fees.

We at Tata Capital offer credit cards tailored to your unique needs. You get low-interest rates, balance transfers on EMIs, flexible payments, and enjoy hassle-free and easy repayment options. Besides, you can apply for credit cards online and avail of services like online payment and NEFT.

Visit our website today to find a credit card compatible with your needs.

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