A credit card gives you an interest-free period between the purchase and the payment due date, but only when you pay the full statement balance by the due date.
Paying the minimum due#
The minimum amount due keeps your account in good standing, but interest is charged on the unpaid balance. On most cards, new purchases also lose the interest-free period until the balance is cleared.
| Item | Amount |
|---|---|
| Unpaid balance | ₹50,000 |
| Interest for the month (before GST) | ₹1,750 |
Card interest rates are much higher than most loans, so carrying a balance for months becomes expensive quickly. Check your card's actual rate in the key fact statement.
Habits that keep it free#
- Set up auto-pay for the full statement amount.
- Avoid cash withdrawals on a credit card: interest usually starts the same day, plus a fee.
- If you already carry a balance, a lower-interest personal loan to clear it can cost less. Compare the total cost first.