Festive season spending in India: Experts say BNPL and credit fuelling growth, but debt risks loom

As India heads into the festive season, credit-driven spending continues to grow, with credit cards, Buy Now Pay Later (BNPL) schemes, EMIs, and personal loans shaping consumer behaviour. While festive sales offer potential savings, experts warn that easy access to credit can also fuel overspending and increase household debt.

Over the last 3-5 years, festive spending in India has seen a sharp rise, driven largely by credit cards and BNPL schemes.

RBI data indicates that credit card spending in September 2024 surged 25% year-on-year to ₹1.76 lakh crore, while active cards crossed 106 million. BNPL has grown especially in digital-first and non-metro segments, although regulatory changes and fintech pivots towards structured EMI products have moderated its explosive rise.

“Festive season sales present a paradox for consumers,” said Anand Agrawal, Co-Founder and CPTO of Credgenics. “Planned purchases can yield genuine savings, but impulsive buyers, swayed by flash sales and easy credit, often spend beyond their means, increasing the risk of debt.”

Credit instruments such as BNPL, EMIs, and credit cards make purchases feel more affordable by breaking down costs into smaller, manageable payments.

Rohit Garg, CEO of Olyv, explained, “Instant credit options can mask the reality of repayment, especially when multiple credit lines are being used simultaneously. Even financially savvy consumers can underestimate how quickly discretionary spending adds up.”

Data from RupeeRedee, a digital lending platform, provides further insight into broader borrowing patterns. Nearly 47.8% of personal loan requests are now for lifestyle needs such as shopping, travel, gifting, home renovations, and rent, with an average loan ticket size for festive and family events at ₹15,300, peaking at ₹95,000.

“The borrowing trend highlights growing dependence on personal loans to manage both critical and lifestyle-driven expenses,” said Artem Andreev, Director of RupeeRedee. “Indian families use credit not just for emergencies but also to navigate planned social and cultural events.”

Survey data also shows sustained consumer confidence around festive spending.

Aditi Singh, Chief Strategy Officer at Satin Creditcare, said, “92% of consumers plan to maintain or increase their festive budgets in 2025, with an average budget of ₹16,500. While promotions create a perception of savings, most consumers stretch their budgets further. Responsible lending, clear disclosures, and financial literacy are crucial to prevent debt accumulation.”

Manish Shara, Co-Founder and CEO of ZET, noted that for planned big-ticket purchases such as electronics, appliances, or furniture, festive discounts can translate into real savings.

“However, unplanned spending fuelled by credit access remains common. Track your credit utilisation, set repayment reminders, and avoid rolling over balances. Used wisely, credit cards and BNPL can make festive shopping affordable, but missing payments can quickly turn discounts into debt,” he advised.

Raj Khosla, Founder & MD of MyMoneyMantra.com, echoed the importance of disciplined spending.

He added that meta search tools and bank/EMI-linked discounts can help achieve net savings, but consumers must avoid impulse buying and the hidden costs of BNPL or no-cost EMI schemes.

Overall, India’s festive season reflects both opportunity and risk. While evolving payment solutions, digital lending, and BNPL options help consumers stretch budgets and access goods more easily, financial discipline and awareness of repayment obligations remain key to ensuring festive cheer does not turn into long-term debt.

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