Delhi-based CA flags credit card overuse by India’s middle class as defaults jump by 28%
India’s middle class is heading toward a serious financial crisis, said Delhi based Chartered Accountant Ayussh Sanghi in a social media post
In a viral X post, he warned that people are no longer saving for the future, instead they are borrowing just to get through the present.
“Middle class lifestyle today is built on credit,” Sanghi wrote. “The culture of savings is gone. We are not spending aspirationally anymore; we are spending out of desperation.”
▪️“Swipe Now, Worry Later.”
– Instagram, influencer culture, instant delivery apps, they’re selling dreams we can’t afford.
“Middle-class lifestyle” now means credit-fueled consumption.The culture of savings is dead now.
We are not just buying more; we’re buying more to be… pic.twitter.com/43EGTzoMYI— Ayussh Sanghi (@ayusshsanghi) April 7, 2025
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Sanghi points out how people are using EMIs to buy luxury items, swiping credit cards for everyday needs, and using Buy Now Pay Later (BNPL) for basic expenses. From iPhones to dinners to clothing, credit is replacing income.
Credit replacing income as savings culture fades
“We are not just buying more we are buying to be seen,” he said, blaming the rise of social media, influencer culture, and instant delivery apps for pushing people into a cycle of constant spending.
The numbers reflect the seriousness of the issue. Credit card defaults in India jumped by 28 percent in 2024. Non-performing assets (NPAs) in the credit card sector reached Rs 6,742 crore, up from Rs 5,250 crore in 2023 and just Rs 1,108 crore in 2020. That’s a more than 500 percent increase in five years.
Sharp rise in defaults and unsecured debt sparks concern
At the same time, outstanding credit card debt in India has doubled—from Rs 1.4 lakh crore in 2020 to Rs 2.92 lakh crore in 2024. Annual credit card transactions also rose sharply, from Rs 6.3 lakh crore in FY21 to Rs 18.31 lakh crore in FY24.
Sanghi added that the number of active credit cards has grown to 10.88 crore as of January 2025, compared to 6.1 crore in 2021. Most of this debt is unsecured, and missed payments attract very high interest rates ranging from 42 to 46 percent annually.
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In response, the Reserve Bank of India raised the risk weight on unsecured loans by 25 percent in November 2023, highlighting the growing pressure on household debt.
“This isn’t about people being careless with money,” Sanghi said. “It’s about a system that rewards quick spending but punishes those who try to plan for the long term.”
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