Credit Card Interest Rates

Credit Card	Interest Rate per month	Annual Percentage Rate (APR)
Axis Bank Ace Credit Card	3.6%	52.86%
SBI Card ELITE	3.50%	42%
HDFC Regalia Credit Card	3.6%	43.2%
Flipkart Axis Bank Credit Card	3.4%	49.36%
Amazon Pay ICICI Credit Card	3.5% to 3.8%	42% to 45.6%
HDFC Millennia Credit Card	3.6%	43.2%
Cashback SBI Credit Card	3.75%	45%
HSBC Cashback Credit Card	3.50%	42%
HDFC Bank Diners Club Privilege	3.6%	43.2%

*Please note that the interest rates mentioned above are subject to change at the bank’s sole discretion.

Understand that interest charges on your credit card are applicable, in dire circumstances only when you do not pay your credit card bill in full. Until you keep paying your credit card bill in full and on time, you enjoy the interest free period on your credit card. Thereby, you have nothing to do with credit cards finance charges, if you are a responsible card user.

The interest free period on your credit card is a great benefit that could help you save and spend on both nominal-daily as well as occasionally-heavy expenses. If used wisely and appropriately, a credit card is the best thing in your wallet! To maximize benefits, be a responsible user, pay your credit card bill on time and in full, and ensure spending within your repayment capability.

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The interest rate on credit card is charged when you have outstanding amount in your account or when you have taken a cash advance. The following situations may lead to this:

• When you pay only the minimum amount due
• When you pay an amount lower than the total amount due
• When you make no payment at all
• When you have withdrawn cash from an ATM using your credit card

Remember, when you carry forward outstanding balances to the next billing cycle, the new purchases you make are not eligible for the interest-free period. This means that you will have to pay interest on new purchases from the first day onwards.

Interest is charged on credit card on a daily basis as long as the outstanding balance stays in your account. This can make the calculation a bit complicated. To help you understand how your card issuer charges interest on your credit card, here is an illustration. Let us presume the following:

Date of Transaction	March 1, 2024
Amount	Rs. 10,000
Date of Statement Generation	March 6, 2024
Minimum Amount Due	5% of outstanding balance, thereby Rs. 500
Bill Due Date	March 26, 2024
Monthly Credit Card Interest Rate	3%

The interest rate will be calculated in the following scenarios as follows:

(i) If the user paid the full amount due on his/her credit card by March 26, 2024– No interest charges applicable

(ii) If the user made a partial payment before the due date, i.e, March 26, 2024

Let’s suppose the card user made a partial payment of Rs. 5,000 on 21st March and no transactions happened before the next statement date, i.e, April 6th.

Here, interest is applicable on Rs. 10,000 for 21 days, from 1st March to 21st March, and on the remaining Rs. 5,000 balance for 15 days, ie. from 22nd March to 6th April.

The interest calculation is as follows:

Interest charged on Rs. 10,000 for 21 days:	[(21 x Rs. 10,000 x 3% x 12)] ÷ 365 days	Rs. 207.12
Interest charged on the Rs. 5,000 balance for the next 15 days:	[(15 x Rs. 5,000 x 3% x 12)] ÷ 365 days	Rs. 73.97
Total interest payable:	Rs. 207.12 + Rs. 73.97	Rs. 281.09

(iii) If the user made a partial payment after the due date, i.e, March 26, 2024

Here, let’s suppose the user paid Rs. 5,000 on 28th March and made no further transactions with the credit card until the next statement date which is April 6. In this case, the interest is applicable on the initial sum for 28 days that is from 1st March to 28th March and also on the balance for 9 days i.e.,from 28th March to 6th April. The interest calculation is as follows:

Interest charged on Rs. 10,000 for 28 days	[(28 x Rs. 10,000 x 3% x 12)] ÷ 365 days	Rs. 276.16
Interest charged on the Rs. 5,000 balance for the next 9 days	[(9 x Rs. 5,000 x 3% x 12)] ÷ 365 days =	Rs. 44.38
Total interest payable	Rs. 276.16 + Rs. 44.38	Rs. 320.54

(iv) If the user made a partial payment after the due date and used the card for fresh transactions

Now, let’s suppose the user made fresh transactions with the credit card of Rs. 2,000 on 15th March and made a partial payment of Rs. 5,000 on 28th March, then the interest rate calculation will be as follows:

Interest charged on the outstanding balance for 15 days	[(15 x Rs. 10,000 x 3% x 12)] ÷ 365 days	Rs. 147.94
Interest charged on new outstanding balance with a fresh transaction for 13 days	[(13 x Rs. 12,000 x 3% x 12)] ÷ 365 days	Rs. 153.86.
Interest charged on balance after partial payment for 9 days	[(9 x Rs. 7,000 x 3% x 12)] ÷ 365 days	Rs. 62.14
Total interest payable:	Rs. 147.94 + Rs. 153.86 + Rs. 62.14	Rs. 363.94

Responsible credit card usage can keep you away from credit card finance charges. Apply for the right credit card Now!

Credit card interest-free period is the timeframe between the bill cycle’s end to the payment due date. Credit card issuers usually offer up to 50 days of interest-free period to the user. However, this does not mean that all transactions will enjoy the same interest-free period. It depends on the day you make such a transaction. Let’s understand this with the help of an example:

Say the statement date for your credit card is the 20th of every month and the bill is due on the 10th of next month. So, if you make a transaction on the 10th of the previous month, then this transaction will enjoy the full 50-day interest-free period. However, if you make a purchase on the 10th of the current month, that is, 10 days before the statement date, this transaction will only get the 10-days worth of interest-free period. Similarly, a purchase made on the 19th will only get 1 day of the interest-free period.

However, the interest-free period is not applicable in the below cases:

• Cash withdrawal
• Every transaction, if you carry forward your balances to the next cycle

Low interest rate credit cards are those that charge a fairly lower rate, than the usual rate of 3.5% per month in general. These cards are highly suitable for those, who make big purchases with their credit cards. Most of these cards are premium category cards that are usually invite only or come along high annual charges.

Credit Card	Interest Rate p.m.
Kotak Privy League Signature Credit Card	2.49%
HDFC Diners Club Black Credit Card	1.99%
HDFC Infinia Credit Card Metal Edition	1.99%
Axis Burgundy Private Credit Card	1.50%
Axis Bank Magnus Credit Card	2.50%

What is the interest rate on a credit card?
Interest rates on credit cards usually range from 2.5% to 3.5% per month. However, this may vary from issuer to issuer and also from one card to another. You must ensure paying your credit card bill in full and on time, to avoid interest charges.

Is credit card interest rate charged monthly?
Yes, the interest rate on your credit card is charged monthly, on a daily reducing balance- when you have outstanding balance in your credit card account due to incomplete payment by the due date. For better understanding, you can check the credit card interest rate illustration.

How does the interest rate on a credit card work?
Interest is compounded on the outstanding balance on a daily basis. This means that at the end of each day, the interest rate is calculated for the day based on the amount that stands unpaid on your account. The charge, though minimal, is added to your next day’s balance when the interest will be calculated for the next day.

When is interest charged on the credit cards?
Interest is applicable on your credit card when you roll over an outstanding amount to the next billing cycle. In this case, new purchases will also attract interest from the first day onwards.

When should I pay my credit card bill to avoid interest?
You must always pay your credit card bill in full on or before the due date in order to avoid paying any interest on the balance.

Will interest be charged even if I pay the minimum amount due?
Yes, interest will be charged on the remaining balance even after you pay the minimum amount due.