So, credit cards can be pretty handy, but they do come with a catch: interest.
Interest is what the credit card company charges you for borrowing money with your card. If you pay off your bill in full each month, you won't have to pay interest. But if you keep a balance on your card, then you'll have to pay interest on whatever you owe.
If you're curious about how they come up with credit card interest rates, here's a guide to help you out.
The general formula to calculate interest on credit card is:
For example, if you have an outstanding balance of Rs. 10,000 on your card, with an APR of 36%, and you pay it after 30 days, the interest will be:
Interest = (30 x 10,000 x 0.03 x 12) / 365 = Rs. 295
You can also estimate the potential interest cost associated with maintaining a balance on your credit card through Fi Credit Card Interest Rate Calculator. Fi calculator serves as an informative tool to help you make well-informed decisions.
There are some ways to reduce or avoid paying interest on your credit card balances, such as:
Following the RBI's consumer-friendly move to maintain the current 6.50% rate amid rising retail inflation, many banks have kept credit card finance charges or interest rates on hold.
Here is a compilation of interest rates or finance fees imposed by central public and private banks for credit card transactions.
Disclaimer : Rates on credit cards are accurate as of August 17, 2023.
Credit cards can be useful, but they often charge interest on outstanding balances. The interest rate is determined by the APR, the outstanding balance, and the number of days with a balance. To avoid paying interest, you can choose to pay the full balance every month, select a card with a lower APR, opt for EMI plans, or transfer your balance to a card with a lower or zero interest rate.
If you're looking for a credit card that gives you the best bang for your buck, try the Fi-Federal Credit Card. This might just be what you need. With this card, you're assured of a 2% valueback through rewards. But that's not all, as you'll also get 5x on your top 3 brands, 2x on all partner brands, and 1x on everything else, including rent and fuel. What's unique about Fi Money is that you earn points in the form of Fi-Coins, our very own reward system. For travellers, the perks are even better as you can convert your Fi-Coins to airline miles or cashback.
But that's just the tip of the iceberg, as you'll also enjoy airport lounge access, 1% forex, the freedom to choose your own billing cycle, and personalised reminders. With consolidated spend insights, you can easily track your spending and make informed financial decisions.
The monthly interest rate on a credit card in India ranges from 1.2% to 3.99%, depending on the card and the bank
Cash withdrawal interest rates on credit cards are the same as finance charges on outstanding amounts, ranging from 2% to 4% per month, depending on the card applied for.
Credit card interest is charged on unpaid balances and cash withdrawals. Pay your bill in full and on time, and avoid cash advances to save interest.
Credit card interest rate is the APR you pay for borrowing money from your issuer. It's calculated based on the method used by your issuer, such as the average daily balance, which uses your daily balance during the billing cycle.
The interest rate for credit card cash withdrawals is the fee charged by your credit card issuer for borrowing cash. This fee is typically high and can reach 3.5% per month.
