Every month, your credit card statement shows a 'Minimum Amount Due' — typically 2-5% of your outstanding balance. It looks manageable. It feels responsible. But it's designed to keep you in debt for years while the bank collects massive interest.
The Math Behind the Trap
Most Indian credit cards charge 3-3.5% per month (36-42% annually) on revolving balances. On a ₹1 lakh balance with 5% minimum payment, here's what happens:
Month 1: You pay ₹5,000. Interest charged: ₹3,500. Only ₹1,500 goes toward your actual debt. Your real balance drops by just 1.5%.
At this rate, it takes approximately 12 years to pay off that ₹1 lakh, and you end up paying ₹1.6 lakh in interest — more than the original amount.
How to Break Free
Pay a fixed amount instead of the minimum. Even ₹8,000/month instead of the minimum on a ₹1 lakh balance cuts your payoff time from 12 years to 16 months and saves over ₹1.3 lakh in interest.
Stop using the card while paying it off. Adding new charges while trying to pay down debt is like running on a treadmill.
Consider a balance transfer if another bank offers 0% or low-interest transfer options. But read the fine print carefully.
Use our Credit Card Payoff Calculator to see exactly how much you can save.
See the real cost of your credit card debt with our Credit Card Payoff Calculator.
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