5 Key Takeaways
- Nithin Kamath's early Rs 25,000 credit card debt at age 21 took two and a half years to repay.
- After clearing the debt, he cut up the card and avoided credit cards for 12 and a half years, from 2003 to 2014.
- Kamath believes splurging is acceptable only if done with your own money, not borrowed money.
- Borrowing against expected future earnings is risky because extrapolating future income can become a financial trap.
- His personal aversion to debt shaped Zerodha's bootstrapped philosophy of growing without relying on borrowed money or venture capital.
The Rs 25,000 Credit Card Debt That Made Zerodha CEO Nithin Kamath Avoid Credit for Over 12 Years
Nithin Kamath reflects on the earliest money mistake that shaped his personal and professional attitude toward borrowing for more than a decade.
Nithin Kamath, the co-founder and CEO of Zerodha, has opened up about one of his earliest and most painful money mistakes. In his early twenties, a single credit card left him with a Rs 25,000 debt that took roughly two and a half years to repay. The experience was so formative that Kamath avoided credit cards entirely for more than a decade. He shared the story during a Zerodha Varsity podcast in September 2026.
The debt began with what seemed like a practical decision. Kamath was 21 years old and wanted to pay for the Graduate Management Admission Test, often called the GMAT. This exam is commonly required for admission to business schools. But he never ended up taking the test.
“I bought it for paying my GMAT fees. GMAT... I never took the exam because I never finished engineering,” he said.
What started as a Rs 25,000 liability became a long repayment exercise. Kamath said the experience fundamentally changed the way he thought about borrowing and spending. He recalled the burden clearly:
“With Rs 25,000, it took me two and a half years to clear.”
“Back when I was 21, I bought myself a credit card. It took me two and a half years to clear,” Kamath said.
A 12-and-a-Half-Year Break From Credit Cards
Once the debt was finally paid off, Kamath took a drastic step. He cut up the card and stopped using credit altogether. That decision was not a temporary reaction. It became a long-term personal rule.
“At the end of the two and a half years, I cut my card and I never used it,” he said.
His break from credit cards lasted far longer than many people would expect. He stopped using credit cards in 2003 and did not get another one until 2014. That gap covers more than a decade of his adult life, including the early years of building his company.
“After I stopped using credit cards in 2003, I bought myself a credit card in 2014. That means for 12 and a half years, I didn't really use a credit card,” Kamath said.
That timeline shows that Kamath’s caution around credit was not a short phase. It reflected a deep commitment to avoiding borrowed money. For Kamath, the pain of carrying that early debt outweighed any convenience a credit card could offer.
Splurging Is Acceptable—Borrowing Is Not
The podcast conversation focused on overspending and lifestyle inflation, especially among young earners. Lifestyle inflation refers to the tendency to spend more as income rises, or as people expect it to rise. Many young professionals assume that their future earnings will grow enough to cover their current spending.
Kamath acknowledged that he has his own tendency to splurge. But he drew a clear line between spending money you already have and spending money you have borrowed.
“I think with splurging, it's all okay as long as you do it with your own money,” he said.
Kamath argued that spending on experiences can be valuable. Travel, food, and other experiences can broaden a person’s perspective and create important learning opportunities. He added a crucial qualification: do not borrow to fund that spending.
“But do it without borrowing money from someone. I think that's the key,” he said.
How the Lesson Shaped Zerodha
Kamath’s personal aversion to debt is not just a private preference. It aligns closely with the philosophy that has defined Zerodha since its launch in 2010. The brokerage was co-founded by Nithin Kamath and his brother Nikhil Kamath. Unlike many fast-growing startups, Zerodha did not raise venture capital to fuel its expansion. Instead, it was bootstrapped, meaning it was built using the founders’ own resources and the revenue the business generated.
Before starting Zerodha, Kamath began trading in the stock market as a teenager. He spent years working as a trader and a sub-broker, learning the financial markets from the ground up. That experience helped him build Zerodha into India’s largest retail brokerage, a firm that provides trading services to individual investors rather than large institutions. The company grew through a low-cost, technology-led model that appealed to a new generation of investors.
Throughout this journey, Kamath maintained the same personal rule about debt that he had adopted after his early credit card mistake. The company’s bootstrapped nature mirrors his own belief that it is safer to grow without relying on borrowed money.
A Warning About Extrapolating Future Earnings
One of the biggest risks Kamath highlighted is the habit of borrowing against future income. Many people overspend because they assume they will earn more later. That assumption can be dangerous.
“A lot of splurging happens because you are extrapolating your future earnings and saying, 'I'll be fine'. But sometimes that can be a financial trap as well,” he said.
This warning is especially relevant for young professionals who may feel confident about their career trajectory but have not yet secured that income. Kamath’s advice is not against enjoyment or spending on meaningful things. He made it clear that experiences and personal interests matter. But he stressed that these should be funded with money that already exists, not with borrowed money.
“What I want to say is that there's no borrowing throughout the journey,” Kamath said.
The Bottom Line for Young Earners
Kamath’s story offers a clear lesson about personal finance. A relatively small debt of Rs 25,000 turned into a two-and-a-half-year repayment burden when he was just 21. The experience led him to stay away from credit cards from 2003 until 2014, a period of 12 and a half years.
More importantly, it shaped the way he thinks about risk, lifestyle, and business. His message to young earners is simple: spend on what you value, but do not build a lifestyle on borrowed money. Future income is not guaranteed, and assuming it will arrive can create a financial trap.
Key lesson: Spend on what you value, but do not build a lifestyle on borrowed money. Future income is not guaranteed, and assuming it will arrive can create a financial trap.
Kamath’s own journey from that early debt to building a bootstrapped financial giant shows that avoiding unnecessary borrowing can be a powerful foundation for long-term success. The lesson he learned at 21 still defines his personal and professional decisions today.
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