The Hidden Cost of Credit Card Interest
Credit cards charge one of the highest interest rates – typically 30-42% per annum (2.5-3.5% per month). What seems like a small monthly charge can balloon into massive debt over time.
How Credit Card Interest Works
- Interest-Free Period: You get 20-50 days to pay without interest if you pay full amount
- Interest Trigger: If you pay less than full amount, interest is charged on entire balance
- No Grace Period: Once you revolve credit, new purchases immediately attract interest
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Smart Strategy
If you have outstanding credit card debt, consider taking a personal loan at 12-15% to pay off the card. This can save you 15-25% in interest annually.
Credit Card Interest Rates in India
| Charge Type | Typical Rate |
|---|---|
| Revolving Credit Interest | 2.5-3.5% per month |
| Cash Withdrawal Interest | 2.5-3.5% per month + fees |
| EMI Conversion | 12-24% per annum |
| Late Payment Fee | ₹500-1,300 |
How to Get Out of Credit Card Debt
- Stop using the card immediately
- Pay more than minimum due
- Consider balance transfer to lower rate card
- Take personal loan to clear card debt
- Negotiate with bank for lower rate or settlement