Study finds 93% of low-income salaried individuals rely on credit cards

Mumbai: Reflecting growing reliance on credit cards among low-income groups, a study has found that around 93 per cent of salaried respondents earning less than Rs 50,000 per month rely on the plastic money.

The study, which analysed the financial behaviour of over 20,000 salaried and self-employed individuals in India over a 12-month period, stated that 85 per cent of self-employed individuals rely on credit cards.

Buy Now Pay Later (BNPL) services are also not behind with 18 per cent of self-employed and 15 per cent salaried persons using these products, the study by Think360.ai, released on Tuesday, stated.

"In India's evolving credit landscape, products once seen as aspirational, credit cards and BNPL are now essentials for everyone, from salaried professionals to gig workers," Think360.ai Founder and CEO Amit Das said.

The report also underlined the growing dominance of fintechs, which are leading India's digital lending revolution.

In FY23, fintechs disbursed over Rs 92,000 crore in personal loans, accounting for 76 per cent of all new loan originations by volume, the study noted.

These figures reflect how underserved income segments are turning to short-term, digital-first credit products to manage cash flow, the study said, while calling for lenders to adapt their risk assessment models and use smarter AI-driven credit evaluation techniques.

Think360.ai is a global full-stack data science and AI-focused firm.