Question 1

I paid the minimum due. Why was I charged interest on new purchases?

Accepted Answer

Because paying the minimum does not preserve the interest-free credit period, and almost nothing on a statement says so. The Reserve Bank’s Credit Card Directions define that period as running from the date of a transaction to the payment due date, conditional on paying the entire outstanding by that date - and paragraph 9 requires your card’s Most Important Terms and Conditions to state that it is suspended while any balance of the previous month’s bill is outstanding. So once you revolve, everything you spend is earning interest from the day you spend it. On the worked example above that alone is ₹483 in one cycle.

Question 2

Why is the interest so much more than the rate times the balance?

Accepted Answer

Two reasons, and both are in the arithmetic rather than in anything hidden. The first is that interest runs from the transaction date on each piece of the balance rather than on one closing figure, so a purchase made early in the cycle has accrued for most of it. The second is that the daily rate is the monthly rate times 12 divided by 365, not the monthly rate divided by thirty - a difference of about ₹5 a month on ₹1,00,000, which is small until you are arguing about it. Enter your dates and this page shows every piece separately.

Question 3

My recomputation is about 18% short of the statement. What have I missed?

Accepted Answer

Tax. It sits on the finance charge and on the fees, and a bare interest recomputation leaves it out by exactly that proportion. The Reserve Bank’s own illustration shows the shape: ₹10,000 outstanding at 2% a month is ₹200 of interest plus tax and other charges on top. If your statement prints one finance charge line rather than two, the tax is probably already inside it - enter that figure and this page will tell you which of the two readings fits.

Question 4

Can they charge interest on the interest and the fees from last month?

Accepted Answer

No. Paragraph 9(b)(ii) of the Credit Card Directions forbids capitalising unpaid taxes, levies and charges, with effect from 1 October 2022, and the Reserve Bank’s FAQ says so in as many words: card-issuers shall not levy interest or any other charge on unpaid taxes, levies or charges. It is the reason a careful recomputation on the whole previous balance comes out slightly high, and this page reads that gap back into the amount that must have been left out of the base.

Question 5

Why does this page not know my interest rate?

Accepted Answer

Because there is no standard one and inventing it would be the worst thing this page could do. Rates run from about 1.5% a month on some cards to 3.99% on others, and a page that assumed a figure would report every reader on a cheaper card as being overcharged. Your rate is on the statement and in the Most Important Terms and Conditions; the Directions require the annualised percentage rate to be shown with the same prominence as the annual fee. The same goes for the cash advance fee and the late payment fee.

Question 6

I withdrew cash and paid the bill in full. Why is there still interest?

Accepted Answer

Cash advances have no interest-free period at any time. They accrue from the day the money left the machine until the balance is paid, whether or not everything else was cleared on time, and there is almost always a separate cash advance fee billed in the same cycle. This page charges cash that way in every case, which is why it asks for the withdrawal date separately - and it refuses to judge a withdrawal dated into the previous cycle, because that interest was billed on a statement this one cannot see.

Credit Card Statement Check