If I pay the minimum amount due, do I still get charged interest?

Yes, finance charges apply to your full outstanding balance (including new transactions) from the transaction date, unless the entire previous bill is paid in full.

Why do finance charges seem so much higher than the interest rate on a loan?

Because credit card interest is compounded monthly and applied broadly, the effective annualised rate ends up far higher than most other borrowing products. It is designed for short-term, not ongoing, borrowing.

Does paying the full bill every month mean I never pay finance charges?

Correct, if you pay your entire statement balance by the due date every cycle, you get the interest-free period on new purchases and pay no finance charges at all.

Fees & Charges · हिन्दी

Finance charges (APR)

Finance charges, also called interest or APR (Annual Percentage Rate), are what a bank charges when you carry forward a balance instead of paying your bill in full by the due date. In India, this typically works out to roughly 3–3.75% per month, which compounds to an annualised rate in the 40–45% range, regardless of the card's fee tier, since interest rates tend to be fairly uniform across the industry rather than a differentiator between premium and entry-level cards. Paying only the minimum amount due keeps your account in good standing, but finance charges apply to the entire remaining balance, not just the unpaid portion.

Reviewed for accuracy

FAAYDA.COM

Fees & Charges

Finance charges (APR)

Frequently asked questions