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Credit Card Interest Rates in India 2026 – Compare & Calculate Charges

Home Credit Card Credit Card Interest Rates

All credit cards come with a varying interest-free period of 20 to 50 days, wherein you are not charged for making payments with your credit card. However, in some cases, credit card interest rate (finance charge) is applicable, specifically when you do not pay your credit card amount in full, or when you withdraw cash using your card.

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Updated: 16-01-2026 09:31:09 AM

Credit card interest rate is applicable on transactions that do not fall in the interest free period category. It varies from one card issuer to another and may also vary across different credit cards from the same issuer. Unlike other credit card charges like, annual or joining fee, these charges are usage based. Thus, are implied only when you fail to pay your credit card bill completely. Read on to know all about credit card finance charges-what is it, when it is charged, and how it is calculated.

Interest Rates on Top Credit Card Issuers in India 2026

Credit Card Interest Rate per month Annual Percentage Rate (APR)
SBI Card Up to 3.75% 45%
HDFC Bank 1.99% – 3.75% 23.88% – 45%
ICICI Bank 3.75%  45%
Axis Bank 1% – 3.75% 12.68%- 55.55%
IndusInd Bank 1.79% – 3.95% 21.48% to 47.40%
Kotak Mahindra Bank 3.50%- 3.75% 42%- 45%
RBL Bank Up to 3.99% Up to 47.88%
YES BANK 2.49%- 3.99% 29.88%- 47.88%
IDFC FIRST Bank 0.71%- 3.99% 8.5%-47.88%

*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 not always applicable, but 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.

Plus, unlike other loans, credit card interest rates are usually not linked to the user’s credit score and repayment capacity. Every credit card has a preset finance charge and it will be the same for all the customers.

Explore and Get the Right Credit Card for You Now!

What is Credit Card Interest Rate?
When is Interest Rate Charged on Credit Cards?
How is Credit Card Interest Rate Calculated?
What is Credit Card Interest-free Period?
Credit Cards with Low-interest Rates in India 2026
FAQs
Explore More About Credit Card Fees & Charges

What is Credit Card Interest Rate?

A credit card interest rate is the cost charged by the bank on any outstanding balance if you don’t pay your full bill by the due date. Also known as an Annual Percentage Rate (APR), it is usually calculated daily or monthly, so balances grow faster over time. Most cards offer a grace period of 20–55 days, during which no interest is charged if the full bill is paid. However, partial payments incur interest on the remaining balance, and cash advances accrue interest from the date of withdrawal. Therefore, understanding your card’s interest rate and paying on time helps avoid extra costs and manage credit effectively.

When is Interest Rate Charged on Credit Cards?

The interest rate on credit card is charged in the following situations:

  • 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.

How is Credit Card Interest Rate Calculated?

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!

What is Credit Card Interest-free Period?

Credit card interest-free period is the timeframe between the bill cycle’s end to the payment due date. 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.

The interest-free period is not applicable in case of cash withdrawals and on every next transaction when you carry forward your balances to the next cycle.

Credit Cards with Low-interest Rates in India 2026

Some credit cards charge a comparatively lower rate, than the usual rate of up to 3.75% per month. Most of these cards are premium category cards that are usually invite only or come with high annual charges.

Credit Card Interest Rate p.m.
IDFC FIRST Private Credit Card 0.75%
IndusInd Bank Indulge Credit Card 1.79%
Axis Burgundy Private Credit Card 1.50%
HDFC Diners Club Black Credit Card 1.99%
HDFC Infinia Credit Card Metal Edition 1.99%

FAQs

What is the interest rate on a credit card?
Interest rates on credit cards usually range up to 3.75% 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.

What is the interest rate for credit card dues?
Credit card interest rates usually range between 30% per annum to 48% per annum. However, this rate may vary from issuer to issuer and card to card.

What is the interest rate if I pay the minimum due on my credit card?
If you pay only the minimum amount due, the interest rate is calculated on the remaining outstanding balance as well as on new purchases from the date of purchase. The interest rate varies from card to card. Therefore, it is advisable to pay your credit card bills in full and on time to avoid high interest charges.

What is the interest rate for a credit card cash withdrawal?
The interest rate for a credit card cash withdrawal is similar to the monthly interest rate on regular purchases, typically ranging from 30% to 48% annually. This interest accrues from the date of withdrawal until the amount is repaid. Besides this, the issuers also charge a cash withdrawal fee, usually ranging from 2.5% to 3% of the transaction amount, with a minimum fee of Rs. 250 to Rs. 500.

What is the interest rate of a student credit card?
There is no fixed interest rate for student credit cards. The interest rate generally varies between 30% and 48% annually, depending on the card variant

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.

Can I negotiate my credit card interest rate with my bank?
No. The interest rates are set and updated at the bank’s sole discretion and they cannot be negotiated.

How does my credit score affect my credit card interest rate?
Unlike other credit products like personal loan and home loan where interest rates vary from one consumer to consumer, credit card interest rates remain the same for all users. Credit score does not have any impact on credit card interest rates.

Can the credit card company change my interest rate?
Yes. Card issuers reserve the right to revise the interest rate on their credit cards. You will be notified about any such changes through SMS and email on your registered mobile number and email address.

Do cash advances starts attracting interest charges immediately?
Yes. In most cases, cash advances do not qualify for the interest-free period, which means interest will be applicable from the day of withdrawal until the amount is paid off in full. Also, when you withdraw cash from credit card, new transactions also become ineligible for the interest-free period, thus quickly adding up the charges.

Which credit card has a low interest rate?
Some of the best credit cards with low interest rates are IDFC FIRST Private Credit Card, IndusInd Bank Indulge Credit Card, Axis Burgundy Private Credit Card, and HDFC Diners Club Black Credit Card. However, keep in mind that interest rates can change over time, so it is advisable to visit the official website of the respective issuer for the updated rates.

Is credit card interest charged monthly or annually?
Credit card interest is usually expressed as an Annual Percentage Rate (APR) but is calculated on a daily basis on your outstanding balance. The APR gives the yearly cost, while actual interest accrues based on how long you carry the debt.

What are the factors that affect a credit card’s interest rate?
Interest rates depend on several factors including your credit score, repayment history, type of card, outstanding balance, and bank policies.

What types of credit card transactions attract interest charges?
Interest is typically charged on outstanding balances, cash advances, balance transfers, EMI conversions, and certain fees if not paid within the grace period. Regular purchases may avoid interest if the full statement balance is cleared on time.

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