India now has more than 10.7 crore active credit cards in use. What has grown faster than the card base, though, is the money owed on them. Outstanding credit card dues with banks have climbed past ₹3 lakh crore, up from ₹2.95 lakh crore at the end of March 2025 and just ₹2.10 lakh crore two years before that.

The reason so many people end up stuck is arithmetic, not carelessness. Credit card interest typically runs at 3 to 3.75 per cent a month, which works out to roughly 36 to 45 per cent a year once compounding is factored in. Add 18 per cent GST on the interest and finance charges, and a bill that felt manageable in month one becomes a different animal by month six.

The minimum-due trap. Paying only the minimum amount due keeps your account technically current and protects your credit score, but it does almost nothing to the principal. The Reserve Bank has since tightened this ; the minimum due must now be set so that it at least covers the full interest and charges for the month, so the borrower is not silently sliding backwards. Even so, minimum payments are a stalling tactic, not a repayment plan. Also worth knowing: the interest-free period disappears the moment you carry a balance forward. New purchases start accruing interest from day one.

Four ways out, in rough order of preference

Convert the outstanding to EMI. Most issuers will let you convert a large balance into a fixed-tenure EMI at 12 to 18 per cent a year. That is a fraction of the revolving rate. Ask about the processing fee and the foreclosure charge before you agree, and check whether the conversion frees up your credit limit.

Take a personal loan and clear the card. Personal loans run at roughly 10 to 16 per cent depending on your profile. Replacing 40 per cent debt with 14 per cent debt is straightforward maths. The discipline required is not touching the card again once it is cleared — a lot of people end up servicing both.

Balance transfer. Moving the outstanding to another issuer buys you an interest-free window of typically three to six months. It works only if you use the window to actually pay the balance down. If you reach the end of it still owing most of the money, you have paid a transfer fee for nothing.

Settlement — the last resort. A one-time settlement lets you close the account for less than you owe, but the account is reported as "settled" rather than "closed", and that stays on your credit report for years. It will affect loan approvals well after the immediate problem is gone. Treat it as damage control, not a strategy.

Staying out once you're out

Pay the full statement amount, not the minimum. Keep utilisation under about 30 per cent of your limit — going higher drags your score down even when you are paying on time. Do not use the card for cash withdrawals, where interest starts immediately and there is no grace period. And avoid running more than two or three cards unless you have a reason to.

One recent change makes discipline matter more than it used to: since April 2026, payment updates — on time or missed — must show up in credit reports within 7 to 14 days rather than the earlier 15 to 30. Mistakes now surface faster, and so does recovery.