Credit card settlement means the card issuer agrees to take a smaller amount to close your unpaid card dues. Before that, you can ask for an EMI plan. The bank decides, there is no fixed percentage, and the card is usually shown as "settled" on your credit report. Below: the process, your options and how we help.
You decide every step
Last reviewed:
A credit card is unsecured, revolving credit. If you pay only the minimum due, the unpaid balance carries finance charges and new purchases may lose the interest-free period. Missed payments add late fees and tax on fees and interest. In a few months the dues can grow well beyond what you actually spent.
Calls may continue while your request is reviewed. Recovery is lawful; harassment is not. Agents must not call before 8 AM or after 7 PM, threaten you or shame you to family or colleagues. Keep a log of calls and screenshots, and complain in writing to the bank's grievance officer if they cross the line. See help with recovery pressure.
The card is cancelled and usually shows as "settled", not "closed". Lenders see "settled" as a negative sign, so new credit may be harder for some time. Settlement does not improve your score. Rebuilding takes on-time payments on everything else. Keep the offer letter, receipts, bank statement and No Dues letter permanently: old card accounts sometimes resurface with a different agency. If the card was used for business, ask a chartered accountant how the waived amount is treated. Read loan settlement vs loan closure.
It can help if you truly cannot pay the full dues, because the bank may accept a smaller amount and the dues stop growing. The downside: the card is closed and usually shown as "settled" on your credit report, which can make new loans or cards harder for some time. If you can manage an EMI plan, that is usually better for your credit report.
You tell the bank in writing that you cannot pay in full and why. The bank checks your case under its own policy. If it agrees, it sends a settlement letter with the amount and dates. You pay only the bank, then ask for a no-dues letter. RBI's June 2023 rules let each bank and NBFC settle under its own board-approved policy.
Usually no. Banks normally close the card after a settlement. Ask the bank to confirm this in the settlement letter.
There is no fixed percentage. RBI's June 2023 rules ask every bank and NBFC to set how much of a dues amount it can reduce in its own board-approved policy, so the figure depends on the lender, your account and what you can pay. We do not quote or promise any percentage, and no one else can promise one for a lender.
Usually, yes. A settled account is normally shown on your credit report (CIBIL) as "settled" and not "closed". This can lower your score and make it harder to get a new loan or card for some time. Settlement does not improve your CIBIL score. We explain this before you decide.
The main steps are similar. You contact your card bank, explain why you cannot pay, and the bank decides whether to offer an EMI plan or a settlement. Each bank has its own policy and terms.
RBI's framework of 8 June 2023 lets banks and NBFCs settle dues under their own board-approved policy. It sets no fixed percentage and gives no borrower a right to settle. While you talk to the bank, recovery rules still apply: under circular RBI/2022-23/108 agents may call only between 8 AM and 7 PM and must not shame or threaten you.
Each bank decides on its own. We help you plan which card to deal with first and how to talk to each bank.
Some banks first offer an EMI plan or a reversal of charges rather than a settlement at an early stage. Settlement talks are more common once the card is well overdue, but every issuer follows its own policy. Ask in writing.
Yes. A bank can pursue civil recovery, for example a recovery suit, arbitration where the agreement allows it, or a Lok Adalat. Non-payment of a card bill is generally a civil matter. A criminal case for cheque bounce arises only if a cheque you gave was dishonoured.
No. Pay only after you get a written settlement letter from the bank, and only into the bank's official account or payment channel. Never transfer money to an agent's personal UPI ID or account.
Tell us a few details about your loans. We will look at them and explain the options that may suit you.