Modern times require modern solutions. Likewise credit card companies are finding innovative ways to get customers to repay their outstanding credit card bills. As a result of the financial stress caused by the Covid-19 pandemic and the subsequent lockdowns, customers held off paying their outstanding credit card bills. The pandemic has put a lot of strain in every industry and the general public is not able to deal with the financial crunch. 

Banks are either providing incentives to those customers who are willing to pay their dues following the moratorium or they have increased penalties for the  customers in order to avoid defaults.

Let us look at the different approaches adapted by leading banking companies in India in handling credit card dues. 

Axis Bank saw a net reduction in their cardholder count by 175,000. ICICI Bank by 45,000 and  RBL Bank by 70,000 in the first quarter of the current financial year. At the industry level, net reductions were 450,000.

State Bank of India, largest credit card provider in India, is urging customers to avail of its curated repayment plan or the restructuring scheme by the Reserve Bank of India (RBI) to repay their dues. Under this scheme, titled Easy Repayment Scheme, customers can convert the outstanding dues into a 15-month loan at a lower interest rate of 13%.

While the RBI restructuring scheme is available only to borrowers who have been financially impacted by the Covid-19 pandemic, (customers who have missed payments by 90 days or more), the Easy Repayment Scheme from SBI Card aims to benefit a wider group of customers. 

The interest income for SBI Cards may be significantly lower due to this scheme, as the EMI loans have considerably lower interest rate than the interest rates charged on credit card dues. But this scheme helps SBI Card reduce the extent of defaults, thereby resulting in better profitability.

On the other hand, credit card issuers such as HDFC Bank and RBL Bank have raised late payment fees to caution customers from defaulting. While HDFC Bank is said to have raised late payment fees by 16-20% for small overdues (up to Rs. 10,000) and by 50-75% for large overdues (Rs. 25,000 and above), it has also increased the interest rate on revolving balances on some credit cards from 3.49% monthly (i.e., 41.88% annually) to 3.6% monthly (i.e., 43.2% annually). HDFC Bank has also hiked the rate on revolving loans to 43.2%, with effect from September, from 41% earlier. 

Banks are also being careful in growing their credit card base during the past six months. They have been filtering out weak and unprofitable customers. While both HDFC Bank and SBI Card witnessed net reduction during the pandemic, they have started seeing net positive additions post June. Many banks and credit card companies are seeing a rise in credit spending almost how it used to be pre-covid period. With the hope of the festive season, credit card companies are expecting a growth in spends of 15-17% compared to 25% last year.

Smart Strategies to Reduce Credit Card Debts

Are you suffering from the mounting debts of credit card dues? Check out smart strategies to free yourself from credit card debts. 

Many individuals find themselves trapped in credit card debts quite early on in their lives. Credit cards can be a boon if used wisely. However, it can be a bane trapping you into a never ending cycle of debt if you’re not careful. It is important for everyone to understand that irresponsible usage of credit cards can result in people to fall in a debt trap that will not only ruin their credit scores but also eat up all their savings and future income until and unless they are cleared. However there are many ways by which you can get rid of credit card dues. Here are some ways to stay out of debt.

Personal Loan: Credit card users can take personal loans to pay off the outstanding credit card balance, but it is not advised in every situation. If you’re struggling to pay your credit card dues on time, then you can make the choice of choosing a personal loan.

Overdue of credit cards attracts high-interest rates that sometimes goes up to 36-40 % every year or perhaps even more. A personal loan, however, comes at a considerably lower rate of interest starting from 11-24 % every year.

Balance transfer: One can use the credit card balance transfer facility and shift the outstanding cash to a lower EMI repayment. It is recommended to choose balance transfer, if you want to ease credit card dues.

Top-up Loans: Other than a personal loan, credit card users may also choose a top-up loan. This will be opted alongside any current home loan. Hence, if you have been regular with your home loan for over a few years with success, you'll be able to get a top-up loan.

Once you apply for a top-up loan, the creditor verifies due diligence on the property and your top-up loan is approved. You can use the loan amount to pay off your credit card debt. Despite the fact that the rate of interest is near to the rate of interest of the house loan, note that there's no tax deduction offered on top-up loans. 

Liquidate investments: This can be one thing to significantly think about. A credit card debt attracts around 36-40 % interest. However, interest from investments even at the simplest form can hardly yield half that rate. Hence, it's urged to interrupt FDs or different low earning investments to pay off the credit card debt. Note that this should not be done on a regular basis. Withdrawing investments ought to be done in rare cases only or you'll not be left with any savings.

Snowball: This can be a different way to pay off your credit card loan. The snowball methodology helps the cardholder payoff the dues steadily one by one, and hence, eases the credit burden. It is also highly recommended to pay off the smaller credit card debts first as they can also improve not only your credit scores but also lower your credit utilization ratio.


The lockdown was hard for every industry. When there was no proper income flow, there was a sharp decline in the credit card repayments. April-May was the worst month for banks as the spending and the repayments percentage were low. However by June most banks were able to pull back into the game by implementing various repayment schemes and imposing penalties on late payments. If you are someone who is a leg back on the repayment game then the above mentioned strategies can help you get free of your credit card debts.