Credit Card Interest rates: Using a credit card can be costly, if you fail to pay your credit card bill on the due date, you may have to bear a huge loss. The bank or other financial institution that issues the card charges heavy interest on the credit card if the bill is not paid on the due date. Not paying the bill on the due date has a bad effect on the user’s financial condition and credit score.
If you use a credit card to meet your various expenses and also withdraw cash from it, then it is important to pay the bill on the due date. If you fail to pay the credit card bill on time, you may have to suffer a huge loss because banks charge high interest rates for delay in bill payment. The interest rates of credit card are known as finance charges. In case of not paying the credit card bill, you can check the details here as to how much interest rate or finance charge a credit card user has to pay in which bank.
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What is the interest rate on a credit card?
| Company | Interest Rate/Finance Charges |
| Bank of Baroda (instant EMI) | 16% p.a. – RoI |
| Maharashtra Bank | 34.44% p.a. – Finance charges |
| Indian Overseas Bank | 30% p.a. – RoI |
| Punjab National Bank | 35.89% p.a. – Finance Charges |
| State Bank Of India | Up to 42% pa – Finance Charges |
| Axis Bank (retail purchases & cash) | 52.86% p.a. – Finance Charges |
| CSB Bank | 45% p.a. – RoI |
| Dhanlaxmi Bank | 22.80% p.a. – Finance Charges |
| Federal Bank | 8.28% to 47.88% p.a. – APR |
| HDFC Bank | 40.80% p.a. – RoI |
| ICICI Bank | 45% p.a. – RoI |
| IDBI Bank | 13% p.a. – RoI |
| IDFC First Bank | Up to 47.88% pa – Finance Charges |
| Induslnd Bank | 36% p.a. – RoI |
| Karur Vysya Bank | 39% p.a. – Finance Charges |
| Kotak Mahindra Bank | 35.88% to 42%pa – RoI |
| Tamilnad Mercantile Bank | 24% p.a. – Finance Charges |
| Yes Bank | 39% p.a. – Finance Charges |
(Note: This data is taken from a report on Forbes.com website.)
Shopping with a credit card becomes very easy. With this, the user also gets benefits like reward points, cashback on every transaction. Due to these features, customers like credit cards a lot. However, it is important to use credit cards wisely. While choosing a card of a bank or financial institution, the user is advised to choose a suitable credit card according to his expenses and the benefits he gets on using the card. During this time, the user should apply for a credit card with a low interest rate.
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What are credit card interest rates?
Credit card interest rates are known as finance charges. These rates may vary from one bank/NBFC to another or for different credit cards offered by the same bank/NBFC. Before taking a credit card, you should know the interest rates applicable on it. Unlike a loan, credit card interest rates do not depend on the credit score and ability to pay the bill of the person borrowing money. Interest rates on all credit cards are pre-fixed and are the same for all customers.
When is interest charged on credit card?
Interest on credit card is charged only when you do not pay the entire credit card bill or when you take a cash advance. You are charged interest on credit card in the following cases.
When you pay only the minimum amount due
When you don’t pay the full bill
When you don’t make any payment
When you withdraw cash from an ATM using a credit card
Remember, if you do not pay the full amount of the previous month’s credit card bill, then interest will be charged not only on the outstanding bill amount, but also on all new transactions you make until you pay the entire bill. Therefore, one should choose a credit card that charges low interest.
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What is credit card interest-free period?
Usually, a credit card offers an interest-free period of 20 to 50 days. Under this, no interest is charged from the user on payment made through credit card. However, this does not mean that the interest-free period will be the same on all transactions. It depends on the day when you make such a transaction.
For example, if the statement date for your credit card is 20th of every month and the date of payment of credit card bill is 10th of the next month, then if you make a transaction on the 10th day of the previous month, then this transaction will come under the interest-free period of full 50 days. However, if you make a purchase on the 10th day of the current month, i.e. 10 days before the statement date, then this transaction will be available only at the value of 10 days of the interest-free period. Interest-free period is not applicable for this. Which includes one cash withdrawal and the other is not paying the previous bill on time. Interest is charged on credit card in some cases like not paying the credit card bill in full, withdrawing cash from the credit card.
(Credit: paisabazaar, forbes)
