Consumer Blog

While it seems that every Credit Card issuing banks advertise about their interest rates as 2.25%* (Terms and conditions apply), not many people or credit card users seem to be aware of the actual interest rates. The actual interest rate for a credit card is anywhere between 30% to 55% yearly!

The interest rate of 2.25% or so is compound interest which we did in mathematics class in high school or so! On top of it, there are many charges by credit card issuers, ( They vary from bank to banks though):

1. Overshooting limit. This is a quite interesting. They allow you to cross the limit by few rupees, but the minimum charge for crossing the limit is Rs. 500/-

2. Late payment fees : If you are late by even a day, they will charge you late payment.

3. Yearly Fees : This is fees for yearly subscription. So, if your credit limit is Rs. 10000/- and your yearly fees is Rs. 1000/-, you are paying Rs. 1000/- a year, whether you are using the card or not!

For more and comparing credit cards, click here.