Credit Card Interest Calculator
See what carrying a credit card balance costs at your card’s monthly finance charge plus GST, and how many months it takes to clear at the amount you can pay each month.
Paying ₹5,000 a month clears ₹50,000 in 14 months and costs ₹15,832 in interest and GST.
Assumes no new spending on the card. Once you carry a balance, banks usually charge interest on new purchases from the day you make them, so the interest-free period is lost until the balance is cleared.
How credit card interest works in India
If you pay the total amount due by the due date, you pay no interest. If you pay anything less, even the minimum amount due, the bank charges a monthly finance charge on the unpaid balance, often around 3.5%–3.75% a month (42%–45% a year), plus 18% GST on that interest. Each bank publishes its rate in the card’s most important terms and conditions (MITC).
How credit card interest is calculated
Each month: interest = balance × monthly rate; GST = interest × 18%; new balance = balance + interest + GST − payment
Most banks charge interest from the date of each purchase, not from the due date, once you carry a balance. And while any balance is unpaid, new purchases also start attracting interest immediately: the interest-free period of 20–50 days is lost until you clear the card in full.
Worked example
₹50,000 balance at 3.5% a month, paying ₹5,000 a month and not using the card:
- Cleared in 14 months
- Interest about ₹13,417 plus GST about ₹2,415: ₹15,832 in total
- 3.5% a month works out to 42% a year, or about 51% once it compounds
What happens if I pay only the minimum amount due?
You avoid a late fee, but interest keeps running on the whole unpaid balance, and the debt can take decades to clear. If the minimum due is 5% of the balance, a ₹50,000 balance at 3.5% a month plus GST takes about 23 years to clear, costing about ₹1.81 lakh in interest and GST, more than three times the original spend. Most of each minimum payment goes on interest, not on the balance.
Interest on cash withdrawal from a credit card
Cash withdrawals carry interest from the day you withdraw, with no interest-free period, plus a cash advance fee. At a typical fee of 2.5% (minimum ₹500) and 3.5% a month, withdrawing ₹20,000 for a month costs about ₹590 in fees and ₹826 in interest, both including GST: about ₹1,416, or 7% of the amount, for one month.
Late payment charges and your CIBIL score
- Late fee: RBI rules allow a late payment charge only when the payment is more than 3 days past the due date, and it is based on the amount outstanding.
- Credit report: a card can be reported as past due to credit bureaus only after it stays unpaid for more than 30 days. One late payment reported then can lower your CIBIL score for years.
- Utilisation: keeping your balance under about 30% of your limit helps your score, even if you pay in full.
Credit card EMI conversion
Converting a big purchase or the outstanding balance to EMI usually costs 13%–24% a year plus a processing fee, far less than the revolving rate of about 42%. Check whether the EMI rate is quoted flat or reducing, and add the fee and GST. The full comparison is in Personal Loan vs Credit Card EMI.
How to reduce credit card interest
- Stop using the card until it is cleared, so new purchases do not attract interest.
- Pay more than the minimum; even double the minimum shortens the payoff dramatically.
- Convert to EMI at a lower rate, if the fee is small.
- Take a personal loan at 11%–16% and clear the card in one go.
- Balance transfer to another card at a low introductory rate, if the fee is small and you can clear it within the offer period.
When to use a different calculator
- Thinking of a personal loan to clear the card? Use the Personal Loan EMI Calculator.
- Comparing EMI conversion with a loan? Use the Loan Comparison Calculator.
Sources
This is general information, not tax or investment advice. See how we check rates and our corrections log.
