The credit card interest rate is the price cardholders have to pay for the privilege of using borrowed funds and not repaying them on time at the end of each billing cycle. The rate of interest applicable to those cardholders who are late on their monthly credit card bill payments vary from one card issuer to the other.
Important things to know about credit card interest rates –
- Interest is charged when cardholders are unable to pay the total amount due on their credit card bill.
- The interest rate is calculated by most financial institutions as per the annual percentage rate, also known as APR. Some card issuers also follow the monthly percentage rate for the calculation of credit card interest rates. It is also referred to as MPR. Few same financial institutions may also adopt both APR and MPR for the calculation of credit card interest rates, but it differs on each type of card.
- If cardholders pay off the total amount due during their credit card bill payment, no interest will be charged. Moreover, if cardholders opt to pay the minimum amount due, interest will also not be charged; however, the total outstanding due amount will be carried over to the next billing cycle and may also incur additional interest.
- In case of special credit cards with 0% promotional interest rate, cardholders are not charged any interest on late bill payments and ATM cash withdrawals for a specified period. For such cards, the annual charges, processing fees, service charges, etc. are comparatively higher.
For premium cards like the RBL Bank SuperCard, you do not need to pay any interest for ATM cash withdrawals for up to 50 days; only a nominal processing fee is charged.
Bajaj Finserv also brings forth pre-approved offers which make availing financing quick by making the application process less time-consuming. Such offers are also applicable to numerous other financial products such as personal loans, business loans, etc. Check your pre-approved loan offer by sharing your name and mobile number.
So, before applying for a credit card, it is advised to learn about the calculation of credit card interest rates and how they are applied.
You can download the Bajaj Finserv app applying for credit card.
