How to use the credit card interest calculator
- Enter your outstanding balance and your card's monthly interest rate from the statement.
- Check the minimum due percentage and floor; 5% is common.
- Add any new spends you expect to keep making on the card each month.
- Set a fixed monthly payment to compare against paying only the minimum.
- Read the time to clear, total interest with GST, and the balance chart.
How the calculation works
Next bill = carried × (1 + r × 1.18) + new spends × (1 + r ÷ 2 × 1.18)
r is the monthly rate and 1.18 adds 18% GST on the interest. Each month you pay the minimum (a percentage of the bill, with a floor) or your fixed amount, and the rest is carried.
Clearing ₹1 lakh at 3.5% a month
With no new spends, a 5% minimum due and a ₹200 floor:
| You pay | Time to clear | Interest + GST | Total paid |
|---|---|---|---|
| Minimum due (5%) | 28 years 1 month | ₹3,53,679 | ₹4,53,679 |
| ₹5,000 a month | 3 years 3 months | ₹94,741 | ₹1,94,741 |
| ₹10,000 a month | 1 year 1 month | ₹24,886 | ₹1,24,886 |
| ₹20,000 a month | 6 months | ₹9,334 | ₹1,09,334 |
The minimum due shrinks as the balance falls, which is why it takes so long. Fixing the payment at the first month's minimum (₹5,000) instead clears it far sooner.
Monthly rate vs yearly cost
| Card rate | Yearly (× 12) | Compounded | Monthly with GST |
|---|---|---|---|
| 3% a month | 36% | 42.6% | 3.54% |
| 3.5% a month | 42% | 51.1% | 4.13% |
| 3.75% a month | 45% | 55.5% | 4.42% |
| 4% a month | 48% | 60.1% | 4.72% |
Compare that with loan rates on the personal loan EMI calculator. If you carry a balance often, a card with a lower rate matters more than rewards; see compare your credit cards.
Frequently asked questions
What happens if I pay only the minimum amount due?
You avoid a late payment fee and a missed payment on your credit report, but interest is charged on the balance you carry, and you lose the interest-free period: new purchases attract interest from the day you make them until you clear the full statement.
How is credit card interest calculated in India?
Banks charge a monthly rate, typically about 3–3.75% (36–45% a year), on the outstanding balance from each transaction date, calculated daily. GST at 18% is added to the interest. RBI rules say unpaid charges, levies and taxes must not be capitalised for charging interest.
How is the minimum amount due calculated?
Usually 5% of the total outstanding, plus any EMIs, fees and amounts over the limit, with a floor of a few hundred rupees. RBI requires the minimum due to be set so the balance does not grow from unpaid interest (no negative amortisation).
Is there GST on credit card interest?
Yes. GST at 18% is charged on interest, late payment fees, annual fees and other card charges.
When does the interest-free period come back?
Once you pay the full statement balance by the due date, new purchases are interest-free again until the next due date.
What is the cheapest way to clear credit card debt?
Stop adding new spends, pay as much as you can each month, and consider converting the balance to an EMI or taking a personal loan at a lower rate. Even at 14–16% a year, a personal loan is far cheaper than 40%+ card interest.