Credit card debt in India has surged, with defaults reaching Rs 4,072 crore and outstanding balances at Rs 2.10 lakh crore as of March 2023. The rapid rise in credit cardholders—from 29 million in 2017 to 62 million in 2021—reflects a growing trend towards formal credit access, including credit cards, BNPL options, and credit EMIs.
To break free from credit card debt, consider these steps:
- Assess Your Credit Card Debt: List all your credit cards with their balances, interest rates, and minimum payments. This helps you plan your repayment strategy.
- Prioritise Your Debts: Use the debt avalanche method to pay off the highest-interest debt first, while making minimum payments on others.
- Create a Budget: Allocate more funds towards debt repayment by cutting non-essential expenses. Use budgeting tools to track your spending.
- Explore Balance Transfer Options: If eligible, transfer your balances to a card with a lower interest rate to save on interest and pay off debt faster.
- Negotiate with Your Issuer: Contact your credit card issuer to discuss lowering your interest rate, waiving fees, or setting up a manageable repayment plan.
- Consider Debt Consolidation: Combine multiple credit card debts into a single loan with a lower interest rate to simplify repayments and potentially save on interest.
- Avoid New Debt: Refrain from making new purchases on credit cards. Focus on essential expenses and living within your means.
- Monitor Your Credit Score: Regularly check your credit score and report to track progress and identify any issues.
- Celebrate Milestones: Acknowledge and reward yourself for reaching debt repayment milestones to stay motivated.
Conclusion: Tackling credit card debt requires a strategic approach and persistence. By assessing your debt, prioritizing repayments, and exploring options like balance transfers and consolidation, you can regain control of your finances and work towards a debt-free future. Stay committed, make timely payments, and avoid new debt to achieve long-term financial stability.
Note: The views in this article are personal opinions intended to raise awareness and are not product recommendations.
