Why India’s Retail Credit Boom Is Cooling — What That Means for Borrowers

If you’ve been wondering why credit card offers feel a bit more “cautious” lately, you’re not alone. The latest numbers from CIBIL show that India’s rapid retail credit growth is losing steam—and clear reasons lie behind it. First off, demand is cooling. Households are becoming more conservative about borrowing as inflation and monthly expenses bite. Many are choosing to reduce discretionary spending rather than piling up debt. The sharp 24 % drop in new credit card originations is a clear sign of that restraint. The Economic Times Second, banks are tightening their lending standards. With rising default risks, lenders are more selective about whom they approve and under what terms. Even when personal loans are approved in volume, the total value of those loans is dipping—suggesting more cautious lending. The Economic Times So what should borrowers take away from this? Here are a few thoughts: Don’t assume easy credit: The era of casually getting large limits or instant approvals may be fading. Always aim for strong financial credentials before applying. Focus on interest rates and hidden costs: When lenders are choosy, terms matter more than ever. Use credit cards wisely: With fewer new offerings, getting rewards or bonus benefits may not be as generous. Leverage what you have smarter. Stay financially flexible: In times of tightening credit, having savings or alternate financing options helps cushion you. In short, the slowdown in retail credit is a signal—not just for banks, but for everyday consumers—to manage borrowing mindfully and stay alert to changing lending conditions.