Credit Card Interest Calculator

Why Indian credit card interest is so brutal

The typical Indian credit card charges 3–4% per month on any balance you don't clear by the due date. That looks small. But because interest compounds monthly, the actual annual cost works out to 42–48% — and then 18% GST is added on top of the interest. A ₹50,000 balance carried unpaid for 12 months ends up costing you about ₹25,000–₹28,000 in interest plus GST. You paid roughly half the original purchase price again, just for not paying on time.

How the bank calculates it (the part the bank won't show you)

The day after your statement due date passes without full payment, two things happen: (1) interest is charged on the unpaid balance from the original purchase date, not from the due date — meaning the "interest free period" disappears retroactively; (2) every new purchase made after the statement date also starts accruing interest from day one — no grace period for new purchases until the old balance is cleared.

Result: a ₹10,000 unpaid balance can balloon to ₹25,000 of interest over 18 months, even if you keep paying the minimum due each month.

What "minimum due" actually means

Your bank shows a "minimum amount due" — typically 5% of the outstanding balance, with a ₹500 floor. Paying only the minimum keeps your account from going to collections, but it does almost nothing to clear the balance. Use our credit card minimum due calculator to see how 20+ years of minimum payments can leave you owing more than you started with.

How to escape the trap (in order of how much it helps)

1. Pay the full statement balance every month. The interest-free period only works if you clear 100%. Pay 99% — you still owe interest on 100%.
2. Convert outstanding balance to an EMI. Most banks offer this at 14–18% annual interest, dramatically cheaper than the ~42% revolving rate. Our credit card EMI calculator shows the real cost.
3. Take a personal loan to clear the credit card. Personal loans at 11–14% are almost always cheaper than credit card revolving credit. Compare with our personal loan calculator.
4. Balance transfer to a 0% promotional offer. Some cards offer 0% interest for 6–9 months on balance transfers — useful if you commit to clearing the balance during that window.

Common myths

• "Paying minimum keeps my CIBIL score safe." Partially true — it avoids late-payment marks. But high utilization (carrying any balance) hurts your score regardless. Our CIBIL guide covers this in detail.
• "The card is free, so it's a good deal." Lifetime-free cards are great as long as you pay in full. The moment you carry a balance, the "free" card becomes the most expensive money you've ever borrowed.
• "Cash withdrawal on a credit card is OK in emergencies." No grace period. Interest from day 1, plus a 2.5–3% cash advance fee. Worst possible borrowing.