Credit cards are popular ways to shop with loads of benefits. Although shopping is convenient, it’s important to settle bill statements on time after your free credit period ends. To use your credit card judicially, there are some aspects to consider seriously, such as knowing what is minimum amount due in credit card, interest rate and other fees/charges.

The Fees & Charges Levied on Credit Cards

Fees/charges levied on credit cards take the form of late payment fees, processing fees for EMI purchases, annual fees, joining fees, interest, etc. Credit card companies charge an annual fee, ranging from Rs.500 to Rs.3000, depending on the card issuer and card type. A joining fee has to be paid too. Additionally, credit card interest rate is something to consider before opting for a particular card. Interest rates vary from card to card and issuer to issuer. Think of opting for the best credit cards from Finserv MARKETS, with low interest charges.

When and How are Interest Rates Charged Credit Cards?

A credit card interest rate is a fixed rate that is pre-determined for a specific card. When you use your credit card, you get an interest free period (usually a month to 45 days). At the end of this, you must settle a credit card bill. Interest rates are charged in the following circumstances:

  • When you only repay the ‘minimum amount due’ in your bill/statement
  • When you pay less than the outstanding balance on bills
  • When you fail to make any payment on your credit card bill
  • When you withdraw cash from an ATM and make a credit card cash withdrawal
  • When you make EMI purchases with a credit card

Once you know the interest rate applicable on your specific card, you can make a simple calculation to know the interest amount charged. The following formula will help you:

Interest per month = Total days x amount of transaction x credit card interest rate per month x 12 months. When you get this figure, divide it by 365 to know the interest charged to you.

It’s Important to Pay your Credit Card Bills

If you want to avoid interest charges, which can range from 40% to 50% per year (depending on cards), amounting to high monthly amounts, use your credit card wisely, avoiding ATM withdrawals as much as possible. Furthermore, if you buy products on EMI, select no-cost EMI options. The most important thing to do is to pay credit card bills on time, and in full, so you don’t fall into a debt trap of accumulating repayments with interest.  

What is Minimum Amount Due in Credit Card Statements?

When you get your credit card bill, you will see a section that states ‘minimum amount due’. This is a small percentage of your total amount due. It is the minimum amount you need to pay your card issuer to maintain your card. By paying this, it doesn’t mean you have settled your total amount due.

Finally, Get the Best Cards

Credit cards from Finserv MARKETS give you the best choice of cards and you can select carefully, noting interest rates of cards and opting for something suiting your spending habits.


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