97 per cent of credit card holders have EMIs or loans: Cred survey

Report reveals 47% of borrowers face higher borrowing costs due to poor credit scores

As many as 97 per cent of credit card holders in India have EMIs or loans, according to a survey conducted by fintech platform Cred, which sheds light on the challenges salaried Indians face in managing credit.

 

The survey titled ‘CRED-YouGov Credit Survey’ was conducted last month and surveyed 5,151 salaried respondents with at least one credit card across Delhi-NCR, Mumbai, Bengaluru, and Chennai. The findings underscore the ambition of Indian credit users —98 per cent prioritise being perceived as financially responsible, and 95 per cent recognise the importance of credit scores in their financial future.

 

If given better access to credit, 54 per cent would increase investments, 38 per cent would start businesses, 30 per cent would pursue education, and 47 per cent would accelerate financial goals, it said.

 

 

However, this ambition comes at a cost. The complexity of financial products is taking a toll, with 97 per cent managing both EMIs or loans alongside credit cards. Of these, 53 per cent have ongoing EMIs, while 47 per cent maintain active loans. Additionally, 63 per cent of respondents invest in mutual funds, further complicating financial management, the survey noted.

 

Many Indians struggle with the administrative demands of managing multiple credit products. The survey found that 39 per cent have difficulty tracking multiple payment dates, and 37 per cent have difficulty navigating different billing cycles.

 

According to survey, 36 per cent monitor spending across various cards, 37 per cent juggle varied interest rates, 33 per cent find decoding reward structures challenging, 38 per cent track promotions, while 30 per cent reconcile credit statements.

 

Despite their efforts, 79 per cent of respondents have faced negative consequences due to low credit scores. Of these, 47 per cent pay higher interest rates, 38 per cent have faced loan rejections, 26 per cent were denied rental applications, and 26 per cent encountered job application rejections.

 

Diligence without results

 

Many consumers take proactive steps to manage their finances, with 25 per cent maintaining detailed spreadsheets, 19 per cent keeping paper records, and 6 per cent relying on mental tracking. Still, 52 per cent miss payments due to various reasons. According to survey, 48 per cent are overwhelmed by their busy schedules, 44 per cent lose track of due dates, 43 per cent misunderstand payment terms, and 50 per cent face timing issues with fund availability.

 

The knowledge-action gap 

 

A significant number of Indians lack awareness about their credit scores, with 40 per cent unaware of their own scores and only 41 per cent regularly checking credit reports. Also, 30 per cent admit to having inadequate credit management knowledge.

 

Psychological toll of credit woes

 

Financial stress is a reality for many, with 79 per cent of respondents experiencing debt-related stress, 45 per cent struggling with multiple commitments, and 39 per cent finding expense tracking challenging. Poor credit scores also have real-world implications — 47 per cent of Indians with credit cards are losing money to high interest rates, 26 per cent face lifestyle compromises due to rental rejections, and 26 per cent see their career growth stifled due to missed job opportunities. About 38 per cent report that their ambitions have been derailed by loan rejections.

 

The survey highlights the need for improved financial literacy and more accessible tools to help Indians manage their credit effectively. As financial complexities continue to rise, addressing the knowledge gap and simplifying credit management could be a key to helping Indians achieve their financial aspirations while avoiding the pitfalls of a poor credit score.