A survey by Cred reveals that 97% of Indian credit card holders manage EMIs or loans, highlighting the challenges of financial complexity. While 98% prioritize financial responsibility, many struggle with tracking payments, billing cycles, and credit management. Poor credit scores impact 79%, leading to higher interest rates, loan rejections, and stress. The survey emphasizes the need for financial literacy and tools to simplify credit management, enabling Indians to achieve their financial goals.
A recent survey by fintech platform Cred highlights the financial realities faced by Indian credit card holders, revealing that an overwhelming 97% are juggling EMIs or loans. Conducted in February as part of the "CRED-YouGov Credit Survey," the study surveyed 5,151 salaried individuals across major cities such as Delhi-NCR, Mumbai, Bengaluru, and Chennai. The findings underscore both the aspirations and challenges of managing credit in India.
Financial Responsibility Remains a Priority
The survey results emphasize the ambitions of credit users in India. An impressive 98% of respondents value being seen as financially responsible, while 95% understand the crucial role of credit scores in shaping their economic futures. Access to better credit could unlock greater opportunities for many—54% expressed a desire to increase investments, 38% would start their own businesses, 30% would pursue education, and 47% would aim to accelerate their financial goals.
The Cost of Ambition: Managing Complexity
However, the pursuit of financial aspirations comes with its own set of challenges. According to the survey, 97% of respondents are managing both EMIs or loans alongside their credit cards, with 53% maintaining ongoing EMIs and 47% holding active loans. To add to the complexity, 63% also invest in mutual funds, making financial management increasingly intricate.
Many individuals find it difficult to stay on top of multiple credit products. For instance, 39% struggle to keep track of various payment dates, while 37% find it challenging to manage different billing cycles. Other obstacles include monitoring spending across cards (36%), navigating varied interest rates (37%), decoding reward structures (33%), tracking promotions (38%), and reconciling credit statements (30%).
Consequences of Low Credit Scores
Despite the diligence of many credit users, 79% of respondents reported experiencing negative outcomes due to poor credit scores. Among these, 47% face higher interest rates, 38% have endured loan rejections, 26% have been denied rental applications, and another 26% have faced job application rejections. These consequences highlight the critical importance of maintaining a good credit score.
Proactive Efforts, Mixed Results
Many Indians take active steps to manage their finances. The survey found that 25% use detailed spreadsheets, 19% keep paper records, and 6% rely on mental tracking. However, these methods are not always foolproof—52% of respondents admitted to missing payments. The reasons vary: 48% blame busy schedules, 44% lose track of due dates, 43% cite misunderstandings of payment terms, and 50% face timing issues with fund availability.
Bridging the Knowledge Gap
A significant portion of the population lacks awareness about their credit scores. According to the survey, 40% remain unaware of their scores, and only 41% regularly check their credit reports. Furthermore, 30% acknowledge having insufficient knowledge about managing credit effectively. This knowledge gap further exacerbates financial stress and mismanagement.
The Psychological Toll of Financial Stress
Debt-related stress is a common experience, with 79% of respondents reporting financial strain. Of these, 45% struggle to keep up with multiple commitments, while 39% find expense tracking a significant challenge. Poor credit scores lead to tangible repercussions—47% report losing money to high interest rates, 26% face limitations in their lifestyle due to rental rejections, and 26% see their career growth hindered by missed job opportunities. Additionally, 38% revealed that their ambitions have been derailed by loan rejections.
A Path Forward: Financial Literacy and Simplification
The survey underscores the urgent need for improved financial literacy and accessible tools to help individuals manage their credit more effectively. As financial products grow more complicated, addressing the knowledge gap and simplifying credit oversight could play a pivotal role in empowering Indians to achieve their goals while mitigating the risks associated with poor credit scores.
By fostering greater awareness and providing practical solutions, the financial ecosystem in India can enable its citizens to navigate the complexities of credit with confidence and ease.
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