Credit cards have been one way to maintain a good credit score and build your credit profile. Some situations have not been making sense to the youth today and hence the use of credit cards have dropped in the market. The charges that the credit card holders bear and the cost of it, are very expensive and thus a lot of people do not opt for these cards nowadays. There are also chances that cyber crimes like identity theft may take place while using credit cards.

Reason for drop in the usage of credit cards

  • The younger population is seen to have opted out of the traditional sources of credit and hence there is a drop in the usage of credit cards.
  • The decline in the need for credit cards has been steady over the years and thus it indicates that the need for these credit options is declining.
  • There might be a number of reasons why the need for credit cards has declined but one obvious reason is the application process.
  • The application process for these cards has been a lengthy one and thus the younger population does not prefer to apply for the same.
  • The first time applicants face a very tough time while availing of these cards as they do not have a credit history
  • The banks have a strict checking mechanism that is followed before the disbursal of these cards for further use
  • The documentation for these cards is also a problem because the documents that are required need to be submitted to the banks 
  • The banks have a detailed list of documents that need to be submitted
  • The hidden charges that are levied by the banks also play a major role in limiting the usage of credit cards.
  • These hidden charges constitute a large amount if added and checked annually.
  • The overall process is cumbersome and thus the youth is shifting to easier sources of credit available in the market.

Alternatives to credit cards

Since credit cards have high entry barriers and are not easily accessible, they are not favorable options in the credit market today.

  • Some credit unions have started their own credit instruments in the market.
  • A lot of instant credit options are available in the market today
  • Rather than having credit cards and paying hefty interest rates on the bill amounts, there is an option to avail of personal loans
  • Personal loans are easily accessible and hence the documentation process  does not take much time 
  • There are digital cards that are available online that are cheaper options as compared to the traditional credit cards
  • The buy now pay later option that is available in the market is a cheaper alternative to credit cards
  • These cards have almost replaced credit cards in the market.

What are BNPL cards?

  • The most common alternative to credit cards is the online buy now pay later cards. They are small-ticket credit instruments. These are generally used in lieu of credit cards in the market today. These cards are excellent sources to start building credit and not use credit cards at the start of your credit journey.
  • This may be advantageous as you may save on the interest costs and also the heavy charges that are levied by the credit card companies. For starting the use of BNPL cards, only the KYC documents have to be submitted and the application is to be filled while applying for these cards.
  • The working of these cards is such that they are associated with merchants where you can buy the products and not pay from your pocket immediately. The pay later option will attract an interest rate and the debt can be paid off accordingly.

What are zero-interest digital cards?

These cards are similar to BNPL cards and the most common card used as a zero-interest card is the LazyCard. These cards are similar to the buy now pay later cards but the usage is much simpler.

While using the LazyCard, one does not have to deal with logging into any website or OTPs. ON the other hand, one can just use the application and pay off the balance that is borrowed using online payment methods like UPI, GooglePay etc.

  • These cards do not have any hidden charges
  • For application, only KYC documents have to be uploaded
  • No interest is levied on repayment
  • The credit limit available is up to Rs. 5 lakhs
  • The credit can be availed for smaller amounts also


Credit cards are a good source of credit and that cannot be denied. But, the digital platforms today and the digital world have a lot to offer. The younger generation availing credit is unwilling to pay hefty charges for getting credit and thus the new platforms have surfaced in the market. The digital lending platforms give access to easy credit and make the application process simpler. The instant availability of credit has reduced the need for people to go to banks or credit offering agencies and ask for credit. The new era is seeing a drastic change in borrowing practices and thus the popularity of credit cards has reduced drastically in the market.

FAQS of Why are credit cards losing credibility in India? Check options

1:Why are credit cards not worth it?

Since credit cards offer very high-interest rates and charges that are hidden, the overall cost of using credit cards is very high. Thus credit cards are not worth it as better credit options are available in the market.

2:What is one danger of using credit cards?

Since the payment towards credit cards directly affects the credit score, any payment that is missed might affect the credit score of an individual. This hampers the report and thus one might not be eligible for credit in the future.

3: Are credit cards safe?

Using credit cards is safer than using debit cards as the debit card accounts are directly related to the bank's accounts which can be a reason for theft in these online transactions.