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How interest rates on credit card are calculated?

How interest rates on credit card are calculated?
Credit card bills may be confusing at times especially when you have missed your deadline or made a partial payment on your bill.

In case if you withdraw cash against your credit card, interest is charged from the date of withdrawal of cash/transaction.

On purchase of goods and services from merchant establishments or service outlet, if you make a payment which is less than the total amount due, the entire outstanding from the date of statement may attract interest.

Example - A cardholder makes a purchase of Rs.15,000/- on January 14. Banks generally give you a grace of 45-days to make the payment. If you make the payment beyond the grace period it will attract an interest rate of 2.95 per cent per month.

If you partially pay, the amount that is not paid will attract an interest rate. Similarly, on additional purchases.

Interest charge will be charged from the date of the transaction till the date of payment, on a reducing balance.

Regarding late payment charges, you can ask for the details such as number of days for which you are required to pay charges, etc., if you are not satisfied by the details given in the statement.

If a cardholder does not receive the statement on the due date, he should obtain a duplicate statement or make the payment on the basis of copies of the charge slips in respect of the purchases made. Non-receipt of statement should not be taken as an excuse for non-payment of dues.

Read more about: credit card banks interest rates
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