Credit Card Interest Calculator
What carrying a card balance costs: months and interest at your payment, and at the minimum due.
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Paying ₹5,000 a month clears it in 1 year 1 month with ₹12,633 of interest; paying only the minimum takes 17 years 1 month and ₹1,10,333.
- Months to clear at your payment1 year 1 month
- Interest paying only the minimum₹1,10,333
- Months paying only the minimum17 years 1 month
- Yearly rate, with monthly compounding51.1%
How this is worked out
- Each month: interest = balance × monthly rate; your payment covers the interest first and the rest reduces the balance.
- Minimum due: 5% of the balance with a floor of 200, the common rule; it shrinks with the balance, which is why it takes so long.
Assumptions
- No new spending on the card while you clear it; new purchases also lose the interest-free period while a balance is carried.
- GST on interest and late fees are left out.
The formula
Each month: interest = balance × monthly rate; payment − interest reduces the balance
- Monthly rate: card interest is usually quoted a month; 3.5% a month is 42% a year before compounding
- Minimum due: commonly 5% of the balance with a floor of 200
Paying only the minimum stretches a balance over years because the minimum shrinks as the balance does.
A worked example
A ₹50,000 balance at 3.5% a month, paid at ₹5,000 a month, clears in 1 year 1 month with ₹12,633 of interest.
Questions people ask
How is credit card interest calculated in India?
Interest runs on the unpaid balance from the date of each purchase at the card's monthly rate, often 3 to 3.75%. Once you carry a balance, new purchases also lose the interest-free period until it is cleared in full.
What happens if I pay only the minimum due?
You avoid a late fee, but interest keeps running on the rest. Because the minimum is a share of a shrinking balance, a modest balance can take years to clear and cost more in interest than the original amount.
How can I pay off a card balance faster?
Pay a fixed amount well above the minimum every month, stop new spending on the card, and consider moving the balance to a cheaper loan, such as a personal loan, if the total cost is lower.
From the Savingy Guide
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Sources
Estimates are for illustration only and assume constant returns. Actual returns vary with market conditions. This is not investment advice.