The Growing Credit Craze Among Youth
Today’s youth are rapidly moving towards financial independence and are eager to achieve their dreams faster than ever. To fulfill their aspirations, many are spending beyond their income, increasingly relying on credit cards and loans. According to a recent study by Paisabazaar, young adults aged 25 to 28 are showing a marked interest in credit products such as credit cards and home loans.
This shift not only reflects changing financial mindsets but also highlights the easier access to credit in the digital age.
The Rise of Credit Card Usage
Paisabazaar analyzed credit patterns of over one crore customers and found that those born in the 1990s start using credit cards between the ages of 25 and 28. In contrast, earlier generations, like those born in the 1960s, started using credit products around the age of 47. Today’s generation prefers credit cards for online shopping, travel, and dining out, drawn by benefits such as cashback, reward points, and travel perks. Banks like HDFC and SBI are offering youth-oriented cards with low annual fees to attract this demographic.
Interest in Home Loans Rising
In addition to credit cards, a growing number of young adults are also turning to home loans. Despite the high costs of buying property in metro cities, many are boldly applying for home loans by age 28. The study shows that people born in the 1990s plan to own a house before turning 33.
Why This Shift?
The rise of fintech platforms, pre-approved loan offers, and Buy Now Pay Later (BNPL) options have made access to credit easier and faster. Young people now prefer handling big expenses like smartphones, travel, or homes through EMIs, using credit strategically to manage cash flow.
A Word of Caution
While this easy access to credit is empowering, experts warn that unplanned borrowing can lead to debt traps. Missing EMI or bill payments can negatively affect one’s credit score. Therefore, it's essential for youth to track their income and expenses carefully and use credit only when financially viable.
