# How to Get Out of Credit Card Debt: A Step-by-Step Plan > A step-by-step plan to clear credit card debt in India: avalanche vs snowball in real numbers, card EMIs, balance transfers, loans and your bank. Source: https://trykosh.com/learn/how-to-get-out-of-credit-card-debt Guide - Credit cards # How to get out of credit card debt Credit card debt grows at around 50% a year once interest compounds and GST is added. The way out is the same for almost everyone: stop it growing, lower the rate, and pay in a fixed order. Here's the plan, with numbers. Updated 25 October 20266 min readBy the Kosh team On this page[Step 1: Stop the balance growing](#stop)[Step 2: List every debt](#list)[Step 3: Pick an order: avalanche or snowball](#avalanche-vs-snowball)[Step 4: Lower the interest rate](#lower-rate)[Step 5: Talk to your bank](#talk-to-bank)[What not to do](#what-not-to-do)[After you're debt-free](#after)[FAQs](#faq) ## Step 1: Stop the balance growing Nothing else works while the balance is still rising. For the next few months: - **Stop using the card** for new spending. While you carry a balance, new purchases attract interest from the day you make them. Remove it from shopping apps and wallets. - **Keep paying at least the minimum** on every card and loan, on time. A missed payment adds a late fee, GST, and a mark on your credit report that lasts far longer than the debt. - **Keep a small buffer.** One month of essentials in a savings account stops the next surprise from going back on the card. See [how much emergency fund you need](/learn/how-much-emergency-fund-do-i-need). - **Find the monthly amount you can commit.** A [budget planner](/tools/budget-planner) built from last month's statements shows where an extra INR 5,000 or INR 10,000 can come from. ## Step 2: List every debt Write down every balance, its interest rate and its minimum payment. Card rates are quoted monthly; multiply by 12 to compare them with loan rates. Here's an example we'll use for the rest of this guide: Example debts Debt Balance Yearly rate Minimum each month Credit card INR 60,000 42% (3.5% a month) INR 3,000 Personal loan INR 3,00,000 14% INR 10,500 Consumer durable loan INR 45,000 11% INR 3,500 Total INR 4,05,000 INR 17,000 ## Step 3: Pick an order: avalanche or snowball Both methods pay every minimum and put all extra money on one debt at a time. When that debt is cleared, its payment rolls into the next one. They differ only in the order: - **Avalanche:** highest interest rate first. Always the cheapest. - **Snowball:** smallest balance first. You close accounts sooner, which keeps some people going. With the debts above and INR 5,000 a month on top of the minimums (INR 22,000 in all), the [debt payoff calculator](/tools/debt-payoff-calculator) gives: INR 4,05,000 of debt, three ways Plan Monthly payment Debt-free in Total interest Minimums only INR 17,000 2 years 11 months INR 1,15,142 Snowball, INR 5,000 extra INR 22,000 1 year 10 months INR 67,108 Avalanche, INR 5,000 extra INR 22,000 1 year 10 months INR 61,462 Avalanche, INR 10,000 extra INR 27,000 1 year 5 months INR 47,078 The extra INR 5,000 a month matters far more than the method: it saves over INR 50,000 and a year. Between the methods, avalanche saves INR 5,646 here. If your smallest debt is also your most expensive, as credit cards often are, the two orders are the same anyway. Pick avalanche unless you know you need early wins to stay motivated. ## Step 4: Lower the interest rate At over 40% a year, card debt is the most expensive money most people ever borrow. Moving it to something cheaper can save more than any payoff order. Your options: Ways to refinance card debt Option Typical cost Watch out for Card EMI conversion Well below the revolving rate, plus a fee and GST Converted amount stays blocked on your limit; foreclosure fees Balance transfer to another card Low or zero rate for a few months, plus a fee and GST The rate jumps after the offer; only works if you clear it in time Personal loan to consolidate Depends on your credit profile, plus a processing fee and GST Don't run the cards up again once they're cleared Loan against FD, gold or a top-up home loan Usually lower, as it's secured You put an asset at risk; stretching repayment over years can cost more in total ### Card EMI Most banks let you convert a balance or large purchases into EMIs. On INR 50,000 at 16% for 12 months with a 1% fee, the [credit card EMI calculator](/tools/credit-card-emi-calculator) puts the EMI at **INR 4,537** and the total extra cost at **INR 5,827**, including 18% GST on the interest and fee. Paying the same amount each month while revolving at 3.6% a month would cost **INR 18,481**. ### Balance transfer Some cards accept a balance from another card at a low promotional rate for a few months. It's worth it only if you can clear the transferred amount before the offer ends, and only if you stop using the old card. Read the fee, the GST on it, and the rate that applies after the offer, in the new card's key fact statement. ### A personal loan to consolidate Suppose you clear the INR 60,000 card and the INR 45,000 durable loan with a INR 1,05,000 personal loan at 14% for two years with a 2% fee. The [personal loan EMI calculator](/tools/personal-loan-emi-calculator) gives an EMI of **INR 5,041**, total interest of INR 15,992 and an all-in cost of **16.44% a year** once the INR 2,100 fee and GST are included. One EMI replaces two payments, and the card debt stops compounding at over 50% a year. **The common mistake** Consolidation fails when the cleared cards get used again. Lower the limits, or keep one card for essentials you pay in full, before the loan is disbursed. ## Step 5: Talk to your bank If you can't manage even the minimums, call the card issuer before you miss a payment, not after. Banks have options they don't advertise: - **A restructured repayment plan** that converts the balance into fixed EMIs, sometimes at a reduced rate. - **Waiver of late fees** already charged, especially if your record was clean before. - **A settlement**, where the bank accepts less than you owe. This is a last resort: your credit report will show the account as "settled" rather than "closed", which lenders read as a red flag for years. Get any settlement offer in writing before paying. Recovery agents must follow RBI's rules, including calling only between 8 am and 7 pm and not harassing you or your family. If a bank doesn't resolve a complaint within 30 days, you can escalate to the RBI Ombudsman through [RBI's complaint portal](https://cms.rbi.org.in/). ## What not to do - **Don't pay one card with another card's cash withdrawal.** You add a cash advance fee and interest from day one. - **Don't pause SIPs to put the money in a savings account.** Either invest it or use it to pay debt. Idle cash earning 3% while debt costs 42% is the worst combination. - **Don't close old cards the moment they're paid off.** Their limit helps your utilisation. Just stop using them. - **Don't use "buy now, pay later" to bridge the gap.** It's another lender with its own fees. ## After you're debt-free Keep paying the same amount you were putting on debt, but into savings: first a full emergency fund, then goals. Use the card again only for spending you'll pay in full, and set a reminder before every due date. The [monthly budget guide](/learn/how-to-build-a-monthly-budget) helps you keep the new habit. [Free tool**Debt payoff calculator**Juggling a credit card, a personal loan and an app loan? See when you'll be debt-free and which order saves the most.](/tools/debt-payoff-calculator)[Free tool**Credit card EMI calculator**Turning a large card purchase into EMIs is far cheaper than revolving it, but not free. See the full cost including the fee and GST.](/tools/credit-card-emi-calculator)[Free tool**Personal loan EMI calculator**Personal loans are unsecured, so rates and fees are higher than on home or car loans. See the EMI, the fee that comes off your disbursal, and what the loan really costs each year.](/tools/personal-loan-emi-calculator)[Free tool**Credit card minimum due calculator**Paying the minimum due keeps your card in good standing but barely touches the debt. See how long it would take and what it would cost.](/tools/credit-card-minimum-due-calculator)[Free tool**Credit utilisation calculator**Your credit utilisation is how much of your card limits you're using. It is one of the factors in your credit score that you can change fastest.](/tools/credit-utilization-calculator)[Free tool**Debt-to-income ratio calculator**How much of your income already goes to EMIs and card dues? This ratio decides whether a lender says yes to your next loan, and whether you should ask.](/tools/debt-to-income-ratio-calculator) **Where Kosh fits** Kosh reads your card and bank statements, shows exactly how much interest and GST you paid last month, and keeps the payoff plan in front of you with reminders before each due date. It never recommends a specific lender or card. ## Frequently asked questions What is the fastest way to get out of credit card debt? Stop using the card, pay every minimum on time, and put all extra money on the most expensive debt first. Moving the card balance to a cheaper EMI or personal loan cuts the interest further, so more of each payment reduces the debt. Is the avalanche or snowball method better? Avalanche, paying the highest-rate debt first, always costs the least interest. Snowball, paying the smallest balance first, gives quicker wins. The difference is often small; the size of your extra monthly payment matters much more. Should I take a personal loan to pay off credit card debt? It usually saves money, because personal loans typically cost far less than revolving card interest of over 40% a year. Compare the full cost including the processing fee and GST, and don't run the cards up again after clearing them. Does settling credit card debt affect my credit score? Yes. A settled account appears on your credit report as settled rather than closed, which lenders treat as a sign you didn't repay in full. It can make loans harder to get for years, so use settlement only as a last resort. Can I convert my credit card outstanding into EMI? Most banks let you convert the outstanding balance or large purchases into EMIs at a lower rate than revolving interest. Expect a processing fee and 18% GST on the fee and on each month's interest. Should I use my savings to pay off credit card debt? Usually yes, beyond a one-month buffer. Money in a savings account or FD earns far less than the 40% or more a year that card debt costs, so clearing the card is the better return. ## Sources - [Reserve Bank of India](https://www.rbi.org.in/) Written by the Kosh team and checked against the rules in force on 25 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. Kosh reads your bank and card statements, works out your tax under both regimes and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-how-to-get-out-of-credit-card-debt)