A Guide for beginners: How to Pay Off Credit Card Debt Faster

For young professionals, credit cards are a way to unlock instant purchasing power and even snag some rewards along the way. But not everyone embraces them. While some enjoy the flexibility, others steer clear, wary of falling into a debt trap. The truth is, even with the best intentions, it's easy to end up with balances piling up and no clear plan to pay them off.

If this sounds familiar, don't worry. There's a smarter way forward. Here's how you can tackle credit card debt effectively and take charge of your finances.

Stop adding to your debt with cash or a debit card

One of the first steps to tackle credit card debt is to stop adding to it. Switching to a cash or debit card ensures that you're spending only what you already have. This approach eliminates the temptation to rely on credit and helps you stay within your budget. When you use cash or a debit card, you're more aware of your spending because you see your bank balance decrease in real time, which acts as a natural limiter.

Make as much payment as you can towards your balance every month

Paying only the minimum amount due on your credit card will keep you trapped in debt longer and cost you more in interest. To make real progress, commit to paying as much as you can afford each month. Even small extra payments help reduce your balance faster. So, if you have extra funds from a side hustle or by cutting back on expenses, use it to pay down your credit card debt.

Prioritise high-interest debt

If you have multiple credit cards, focus on paying off the one with the highest interest rate first-this is known as the avalanche method. High-interest debt grows faster and costs you more over time, so clearing it first saves money in the long run. While tackling the highest-interest debt, continue making minimum payments on your other cards to avoid late fees and penalties. Once that is paid off, move on to the next one and so on.

Consider debt consolidation

If juggling many credit card payments feels like too much, debt consolidation can help. It means combining all your credit card debts into a single personal loan with a lower interest rate. This simplifies your repayments by merging them into one monthly instalment. Furthermore, it helps reduce the overall interest you're paying. This strategy works best if you have good credit to qualify for favourable loan terms.

Choose balance transfer credit cards

A balance transfer credit card allows you to move your existing high-interest credit card debt to a new card with a lower interest rate or even a 0% introductory APR for a specific period. This reduces the interest you pay, letting you pay off the main amount faster. But watch out for balance transfer fees and make sure to clear the debt during the promotional period to avoid higher interest later.

Credit Cards: EMIs, rewards and more

Taking control of credit card debt is all about smart choices and better financial habits. As you work toward clearing your balances, it's also important to choose a credit card that aligns with your financial goals. Credit card offers features like easy EMI conversion, rewarding spending categories and user-friendly management tools. This makes it a great option for those looking to balance convenience with responsibility.

Whether you're paying off debt or planning future expenses, having the right credit card in your wallet can make all the difference. Explore how different credit card benefits can help you stay in control while making the most of your financial journey.

This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.