In April 2023, credit card debt will surpass two billion rupees; learn how to pay it off quickly

Being in credit card debt is undoubtedly a bad position, and falling into a debt trap may lead to a variety of issues for anybody. According to recent statistics released by the Reserve Bank of India (RBI), there was a staggering amount of credit card debt outstanding in April of this year—more than Rs 2 lakh crores. The RBI has raised worries about the expanding nature of “unsecured debt” and its long-term effect on investors’ portfolios, even if lenders are not too worried about this enormous debt.

According to RBI statistics, there were 86 million credit cards in use as of April 2023, a considerable rise of over 15% over the 75 million credit cards that were in use at the time. This suggests to us that it wouldn’t take long for us to achieve the milestone of 100 million cards.

In the meanwhile, the results of a recent BankBazaar poll titled “India Credit Card Report” were as follows:

71% of all credit cards are issued by only four institutions.

In April, the average transaction was Rs 5120.

The average monthly expenditure per card in the business was Rs 15,388.

With an average of roughly four purchases each month per card, CSB, South Indian Bank, and Federal Bank are the most utilised cards.

The three credit card companies with the largest monthly expenditure totaling more than Rs 27,000 are Karur Vysya, IndusInd, and CitiBank.

The companies with the largest online expenditure as a proportion of their overall spending include CitiBank, Amex, and IndusInd, with over 70% of all their transactions taking place online.

Does rising credit card debt indicate that individuals today are more willing to take on unnecessary debt?
When opposed to their elders, who tried their best to take out loans or accumulate unnecessary debt, the younger generation is using credit cards more often, which illustrates a shift in how they handle their financial demands. The statistics show how much more today’s generation relies on credit debt to pay for nearly everything. The popularity of novel ideas like “Buy Now, Pay Later” has made it quite simple for customers to apply for loans where they may get money right away without having to go through a lengthy procedure.

Many individuals are observed using credit cards these days to buy “big-ticket” purchases, settle their interest-free EMIs, and change their way of life.

Others see it as a chance to promote India’s ambition of depending entirely on digital payment methods, while others see rising credit card debt as a symptom of impending indebtedness. Credit card debt may be beneficial or detrimental in the long term depending on how it is used. Apart from the ongoing debt, the main worry is how to pay off these loans.

How can debt be swiftly eliminated?

It should be noted that paying down credit card debt is now more simpler than you could have imagined thanks to the RBI’s decision to maintain the repo rate steady. You may use the tips given below to swiftly pay off your credit card debt.

Create a monthly budget and make a commitment to keep to it.

l Start making monthly payments that are more than the minimum.

l Move your debt to a credit card with a reduced APR.

Debtors have two options: either consolidate their present debt into a single credit card and try to pay it off, or try to pay back at least 75% of the loan balance. They must also take care to avoid taking on any new debt until all of the previous debt has been paid off.