Credit Card Interest Calculator
Calculate the true cost of credit card debt. See monthly interest charges, total cost of minimum payments, and the effective annual interest rate.
* All calculations are approximate.
How Credit Card Interest Works?
Calculate the true cost of credit card debt. See monthly interest charges, total cost of minimum payments, and the effective annual interest rate.
Credit card interest is charged monthly on the outstanding balance if you don't pay the full statement amount by the due date.
Most Indian banks charge 2.5% to 3.5% per month, which translates to 30-42% per annum — one of the most expensive forms of borrowing.
Paying only the minimum amount due (typically 5%) keeps your account active but the remaining balance accrues compound interest.
The effective annual rate is higher than the stated monthly rate due to compounding — interest is charged on previously accrued interest.
Formula Used
Monthly Interest = Outstanding Balance × Monthly Rate / 100
Effective Annual Rate = (1 + Monthly Rate/100)^12 - 1, expressed as a percentage
Important — Read Before You Decide
- Credit card interest rates in India range from 24% to 49% per annum, making them one of the most expensive forms of borrowing
- Paying only the minimum amount due creates a debt trap — most of your payment goes toward interest, not principal
- Unpaid credit card balance attracts compound interest, meaning you pay interest on previously accrued interest
- Carrying a high credit card balance negatively impacts your CIBIL score, making future loans costlier
- Balance transfer to a lower-rate card or personal loan can significantly reduce your interest burden
- Reward points and cashback earned on credit cards rarely offset the interest charged on unpaid balances
- RBI mandates that banks clearly disclose the annualised interest rate (APR) and minimum amount due on credit card statements
- Late payment fees (up to ₹1,300) are charged on top of interest if you miss even the minimum payment deadline
What Happens If You Ignore These?
- Spiralling debt due to compounding interest on unpaid credit card balances
- Significant drop in CIBIL score affecting eligibility for home loans, car loans, and other credit
- Paying two to three times the original purchase price when only making minimum payments
- Risk of legal recovery action by banks for prolonged defaults
- Loss of interest-free grace period once you start revolving balances
Smart Tips
- Always pay the full statement balance before the due date to avoid interest entirely
- If you cannot pay in full, pay as much above the minimum as possible to reduce the principal faster
- Consider converting large purchases to EMI at the point of sale — the interest rate is usually much lower than revolving credit
- Set up auto-pay for at least the minimum amount due to avoid late fees and credit score damage
- Use a balance transfer offer to move high-interest debt to a card with a lower introductory rate
- Track your spending with your bank's app and set budget alerts to avoid accumulating unmanageable balances
Frequently Asked Questions
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