Calculate how long it will take to pay off your credit card, compare payment strategies, and see how much interest you can save with different payment amounts.
Credit card debt is one of the most expensive forms of consumer debt in India, with interest rates typically ranging from 24% to 49% per annum. The high interest rates make it crucial to have a strategic approach to paying off this debt to avoid getting caught in a debt cycle.
The Reserve Bank of India (RBI) regulates credit card operations in India, but individual banks set their own interest rates based on market conditions and borrower profiles. Unlike home loans or car loans, credit card debt is unsecured, which explains the higher interest rates charged by banks.
Credit card companies in India typically calculate interest on a daily basis, which means the longer you take to repay your outstanding balance, the more interest you'll accumulate. Most credit cards have a grace period of 18-50 days during which no interest is charged if you pay your balance in full. However, once you start carrying a balance, interest begins to accrue immediately on new purchases.
Our Credit Card Payoff Calculator helps you visualize how long it will take to pay off your credit card debt based on your current outstanding balance, interest rate, and monthly payment amount. It also shows you how much interest you'll pay over time and provides comparisons between different payment strategies.
Credit card interest in India is typically calculated using the daily balance method. This means that interest accrues on your outstanding balance each day. The formula used is:
Daily Interest = (Annual Interest Rate ÷ 365) × Outstanding Balance
For example, if your annual interest rate is 36% and your outstanding balance is ₹1,00,000, the daily interest would be:
(36% ÷ 365) × ₹1,00,000 = 0.0986% × ₹1,00,000 = ₹98.63 per day
Over a 30-day month, this would result in approximately ₹2,959 in interest charges. This is why making only minimum payments can be costly in the long run, as a significant portion of your payment goes towards interest rather than reducing your principal balance.
In addition to the high interest rates, credit cards in India often come with various fees and charges, including:
Understanding these costs can help you make more informed decisions about your credit card usage and repayment strategy.
There are several proven strategies to help you pay off your credit card debt more efficiently:
Continue paying the same fixed amount each month, even as your balance decreases. This prevents the temptation to reduce payments as your minimum due decreases, helping you pay off debt faster.
Focus on paying off the credit card with the highest interest rate first while making minimum payments on others. This minimizes the total interest paid over time.
Pay off the card with the smallest balance first for psychological wins, then roll that payment amount to the next smallest balance. This builds momentum and motivation.
Transfer high-interest credit card debt to a card with a lower interest rate or 0% introductory offer. Make sure to calculate if the transfer fee (usually 1-2%) is worth the interest savings.