Mumbai tops festive credit card use in survey of 100 Indian cities, UPI leads in most categories

Shopping fervour is rising across the country ahead of Diwali and other festivals. A national survey has now thrown up key findings on the spending habits of Mumbai residents. Mumbai leads the country in the use of credit cards for festive shopping.

The report has been released jointly by the Pahle India Foundation and Amazon Pay India. Titled the How Urban India Pays Report 2026, it gives a picture of the changing financial habits of Indian customers. According to the report, digital payment is no longer just an optional convenience but has become an important part of the everyday transactions of urban Indians.

The survey covered 100 cities in 20 states and included 5,149 customers and 1,054 merchants. It studied how urban residents shop, their use of digital payments, their trust in credit cards, purchases on instalments and financial planning.

According to the report, 77 per cent of urban Indians spend at least 50 per cent more than their regular spending during festivals. Of these, 46 per cent spend one-and-a-half to two times their regular budget, while six per cent spend three times their normal budget during festivals. In Jaipur, 88 per cent of people spend double their budget during festivals. The report says Rajkot and Ahmedabad have the highest share of customers who spend three times their budget.

The report says Mumbai, the country's financial capital, uses credit cards the most for festive shopping. Despite the availability of Buy Now Pay Later (BNPL), UPI and other digital payment options, Mumbai's customers show a particular preference for credit cards. Credit cards allow big-ticket purchases, buying goods on instalments and use of several payment facilities. However, if the amount spent is not repaid on time, interest and other charges can apply.

During festivals, customers spend large sums on electronics and home appliances. By total value of purchases, the categories of consumer electronics and home appliances lead. By the share of customers buying, 89 per cent preferred fashion and beauty products, 87 per cent home and kitchen items and 84 per cent groceries.

UPI use continues to grow. In five of the six main categories of urban customer spending, UPI is the most preferred payment option. UPI is preferred by 71 per cent of customers for online shopping, 54 per cent for eating out and travel, 53 per cent for fuel and transport, 53 per cent for medicines and treatment, and 49 per cent for groceries. In addition, 75 per cent of urban customers use at least one financial product on their payment app.

The report also presented the country's first Digital Credit Inclusion Index (DCII) 2026. India scored 55.85 out of 100 and has been placed in the "Emerging and Served" category. The index rests on three components: access to digital credit at 61.24 points, acceptance at 57.17 points and impact at 49.16 points.

Tier-2 cities have performed better than the metros in the use of digital credit. The index for tier-2 cities is 58.64, while the metros score 53.10. In tier-2 cities, Buy Now Pay Later use is at 60 per cent and use of loan-related apps at 41 per cent. In Coimbatore, 70 per cent of people buy electronics on instalments.

Merchants have also benefited from digital payments. Of the merchants surveyed, 80.6 per cent accept digital payments, and 79.5 per cent of them said it has increased their sales. Among merchants who hesitate to accept digital payments, 72.1 per cent named delayed arrival of money in their account as the biggest problem.

Of the gig workers surveyed, 43 per cent said digital credit has increased their financial independence, while 55 per cent of senior citizens said digital payments have increased their self-reliance and confidence. On financial habits, 41 per cent are "planners", who plan their spending. Some 33 per cent prioritise savings, 15 per cent focus on meeting day-to-day expenses, seven per cent make impulse purchases and four per cent borrow with confidence.

Pahle India Foundation chairman Dr Rajiv Kumar said that in less than a decade UPI has transformed India's payment system on a large scale. According to him, urban customers now make digital transactions out of habit, and it is necessary to extend this trust to credit, savings and investment. He said transparent information, cyber security and a credit system that takes care of the needs of people with informal incomes could be important for the goal of Viksit Bharat 2047.

Amazon Pay India chief executive officer Vikas Bansal said urban customers are adopting digital credit with growing confidence for everyday financial management. He said 75 per cent of Amazon Pay's customers are from tier-2 and tier-3 cities. He also said the company's focus is on making credit easier, more transparent and better suited to customers' needs.