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Paying Off Major Credit Card Debt

Updated on August 19, 2011

It was in 2002 when I got my first credit card from Citibank after filling up a simple form and providing a photograph. I was offered this credit card with Rs. 50000 limit by Citibank as I had my salary account with Citibank (Citibank Suvidha account) since year 2000. I also purchased health insurance worth Rs. 1 lakh via my Citibank credit card. I started using the credit card for shopping and paying some utility bills every month. I kept on paying balance every month. In between this, I kept on receiving calls from people offering credit cards from banks like ABN Amro, ICICI, SBI, and HDFC bank. After seeing the benefits of credit cards, I kept on grabbing other cards offered by the telecallers, so in 2005, I had credit cards from ABN Amro Bank, ICICI bank, SBI bank, and Citibank. Now my total limit on credit cards had reached to approximately Rs. 3 lakhs and I was able to make all the payments for all my cards on proper time. Everything went fine was 1 year until 14th January 2006 when I got engaged with final date for engagement celebration and marriage being April 14 and April 16, 2006 respectively.

Now I had already taken a home loan in September 2005, another loan for buying a car, and started using credit cards extensively for buying furniture for my new house from Kirti Nagar Furniture Market, engagement and wedding dresses from Karol Bagh, Rajouri Garden, South Extension, some pair of shoes and sandals, saris for my to be, jewelry including engagement ring and necklace set from Karol Bagh, and shopping for other items required for marriage from various shopping complexes around Delhi. In India, we have a tradition of giving gifts to close relatives at the time of marriage, so I bought clothes for relatives via credit cards from Chandni Chowk market in Delhi. Everything went well, we got married, went for our honeymoon, and came back. Now it was time for me to check my personal finances because before that I didn’t have even a single minute to think about my expenses, debts, loans, earnings, anything.

In 2007, financial problems for me and my family started. Installments for home loan, car loan, and increased expenditure at home after marriage led me into the debt trap of credit cards. I had enjoyed the benefits of credit cards, now it was time for me to enjoy the demerits of credit cards. I admit I was not able to clear my credit card dues every month for several months. The credit card debt kept on increasing. It became so high that I took a personal loan in 2008 to clear two of my credit cards, Citibank and ABN Amro. I did this because I had seen that late fees and interest charges of credit cards are far higher than any other loan, so closing credit card accounts which come under bad debt should be my initial step for becoming debt free. It was in 2009 when after losing all my savings and investments, I closed down all my credit cards and got rid of the biggest financial problem I had in my life. The total amount I utilized from credit cards was Rs. 275000/- and I paid them back more than Rs. 400000/- to come out of debt. Right now, I don’t own any credit cards and only use four International Debit Cards for any types of transactions whether online or offline. I am happy that I am at least credit card debt free.

Use cash instead of credit cards
Use cash instead of credit cards

So it is my personal recommendation to credit card users around the world that getting and using the credit card is very easy but it is very difficult to come out of major credit card debt due to credit card late fees and interest charges, so you must use the credit cards wisely. If you spend extensively on shopping or anything, it will be better if you perform all your transactions in cash or with the use of debit cards. With debit cards and using your own money, you will keep your own spending, your family budget, and your overall personal finances in better control. Also, credit cards are just like plastic money and it is better to pay off major credit card debt as soon as possible.


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    • soni2006 profile image

      Rajinder Soni 6 years ago from New Delhi, India

      Thank you so much crystolite and AllSuretyBonds for your visit and comments on this hub on paying off debt.

    • AllSuretyBonds profile image

      AllSuretyBonds 7 years ago

      Great Hub. Three words. Budget, budget, budget! Setting a budget and sticking to it is key to trying to eliminate some of your credit card debt.

    • crystolite profile image

      Emma 7 years ago from Houston TX

      Nice stuff,thanks for writing.

    • soni2006 profile image

      Rajinder Soni 7 years ago from New Delhi, India

      That's the best way to avoid falling in the debt trap. Nice and simple.

    • ocbill profile image

      ocbill 7 years ago from hopefully somewhere peaceful and nice

      my plan is simple. whatever debt I spend it on (usually less than 3 items - (sometimes "0") I pay off the following month.

    • soni2006 profile image

      Rajinder Soni 7 years ago from New Delhi, India

      Thank you so much LillyGrillzit, calicoaster, and Karanda for your comments. Since I wrote the hub

      two years ago, I have been receiving emails regarding the problems people in India have been having with credit cards. I have tried to answer a few of them sharing my experience with them and will publish a few of them via my hubs for the benefit of other people having credit card issues in India.

    • Karanda profile image

      Karen Wilton 7 years ago from Australia

      Good advice Soni, credit cards can be such a trap if not used or managed well. Cash is always better for up front payment. It makes you stop and think before you buy.

    • calicoaster profile image

      calicoaster 7 years ago

      Kudos to you soni, for efficiently coming out of the debt. Somehow credit cards always scare me, and I will not feel ashamed of admitting that I never ever owned any credit card. It might be my psychological problem that I start getting nervous whenever I have any bills unpaid. I always have used my debit cards for all the transactions and have been quite happy about it!! :D...

      Now, with cheque card facilities, we don't even have the problem of sharing our atm pin number anywhere, they work like credit card only. My friend owns his account in Axis bank and he uses the debit card for all the transactions without having to provide a pin! :)

    • LillyGrillzit profile image

      Lori J Latimer 7 years ago from The River Valley, Arkansas

      I appreciate your Hub, and your honesty in discussing debt. Thanks and good Luck!