New Delhi, Aug. 11 -- When Ashutosh Singh got his first credit card in 2023, he knew one thing: pay the bill on time and build your credit score. Singh, now 26, was working and planning to take an education loan for his MBA. He accepted a lifetime-free card offered over a telecall because it promised cashback and could help build his credit history.

When his first bill arrived, Singh opened the payments app he used for all his bills. The payment page had the minimum amount due pre-selected, without explaining what it meant. Singh assumed the bank was offering him the option to pay a smaller amount without penalty and settle the rest later.

The problem, however, may extend beyond customers consciously choosing the minimum amount. Some cr...