Want to Avoid Credit Card Debt? Read This.

• Small, frequent purchases & UPI-linked cards lead to debt for Indian consumers.
• Paying minimum due results in high interest, costing up to 40% annually.
• Pay bills in full, set spending limits, align billing dates, build emergency fund.

Credit card debt continues to challenge many consumers in India, often arising not from a single large expense but from recurring spending habits. Experts say that understanding these habits and taking early preventive steps can

help individuals stay financially healthy and avoid costly debt cycles.

Common spending habits that lead to debt

Siddarth Jain, CFO at MinEMI, highlights that more than 25% of Indian cardholders either revolve their balances or pay only the minimum due monthly.

“It’s rarely one big splurge that causes the trouble,” he notes.

Frequent small purchases, especially during sale events or using UPI-linked credit cards, can quickly add up without the user realising the growing bill.

Many consumers treat

credit cards as an extension of disposable income rather than borrowed money, which leads to habitual overspending. Impulse purchases and relying on credit for everyday essentials create a dangerous debt trap, say experts.

Why paying minimum due can be costly

Paying only the minimum due each month extends repayment over a longer period and results in significantly higher interest payments. Jain warns that such habits can silently cost cardholders up to 40% a year in interest charges.

“Delayed or

partial repayments trigger high-interest accrual, pushing borrowers into deeper debt," says.

Smart strategies to avoid credit card debt

Experts suggest steps to maintain control over credit card usage:

Pay full bills on time: Jain advises paying credit card bills immediately after purchases, especially when motivated by reward points or offers.

Avoid EMIs unless necessary:Converting purchases into EMIs might seem attractive, but the added interest often outweighs discounts. “EMIs should be used judiciously and only

for planned expenses,” says Jain.

Align billing dates with income: Scheduling your credit card statement date close to your salary credit day makes repayment easier. Setting up automatic full payments before the due date removes the risk of missed payments.

Control spending limits: Personal spending limits set well below the sanctioned credit limit help prevent overspending. Temporarily disabling cards during high-risk periods like festive sales or travel can also help.

Monitor credit utilisation: Keeping credit utilisation under 30%, ideally below 20%, is crucial for maintaining a good credit score and signalling healthy credit habits to lenders.

Build financial discipline and emergency buffers

Experts agree that beyond credit card management, building a disciplined budgeting habit and maintaining an emergency fund are key to financial stability.