Credit cards are a convenient financial tool that allows users to make purchases and manage expenses while enjoying benefits such as rewards and cash back. However, one of the key aspects of credit card usage that can impact your finances is the interest rate. Many ask, 'Do banks charge an interest on Credit Card purchases?' The short answer is: Yes they do, but you can avoid paying the interest and enjoy your Credit Card free. We show you how.

A Credit Card typically offers an interest-free period ranging from 20 to 50 days. Here’s how to calculate it:

1. Identify Key Dates:

Check your monthly statement for two crucial dates: the statement date and the due date.

• Statement Date: This is when the bank issues a statement summarising your previous month’s transactions.
• Due Date: This is the deadline by which you must pay the outstanding balance. It generally falls 20-25 days after the statement date, providing a grace period for repayment.

2. Calculate the Interest-Free Period:

For example, if your statement date is May 1, it covers transactions from April 1 to April 30. The due date will be between May 20 and May 25.

• If you made a purchase on April 2, you would enjoy nearly 50-55 days of interest-free credit.
• Conversely, if you made a purchase on April 29, the interest-free period would be shorter, between 21 to 26 days.

By understanding these dates, you can maximise the benefit of your credit card’s interest-free period.

While you get a guaranteed credit-free period of 20-25 days, you can maximise the number of days by planning your purchases based on your statement cycles.

Read more about understanding Credit Card statements.

You needn't worry about paying interest if you clear your outstanding dues every month on or before the due date. Interest payments become due only if you carry forward balances of the previous month.

For example, if your total dues are ₹12,000, and you pay only a part of it on the due date, you will have to pay interest on the amount you carry forward and any other expenses you make with your Credit Card till you settle the total outstanding.

HDFC Bank Credit Card interest rates range up to 3.4% per month. But, the interest rate may be adjusted based on your relationship with the bank and the card usage.

If you have made large purchases and don't want to settle your outstanding by the due date fully, you could opt for SmartEMIs on your Credit Card. This converts your outstanding into an EMI scheme, which you can repay in pocket-friendly instalments. The interest rates on SmartEMIs are much lower.

Are you looking to apply for an HDFC Bank Credit Card? Click here to learn more!

Is Credit Card free? Click here to read more!

* Terms & conditions apply. Credit Card approvals are at the sole discretion of HDFC Bank Ltd