See how long a credit card balance takes to clear, what the interest and GST really cost, and how much paying only the minimum due adds to the bill.
Why is my card charging 51% and not 42%?
Because 3.5% a month compounds. Twelve months of 3.5% is 51.11%, not 42%, and once 18% GST is added to each month’s interest the effective cost is higher still. The monthly figure on the statement is the honest one, and multiplying it by twelve understates what you pay.
Is paying the minimum due safe?
It protects your credit score and avoids a late fee, and that is all it does. The balance barely moves, the interest keeps running, and because the minimum is a percentage it shrinks as the balance shrinks. Paying the minimum on ₹1,00,000 at 3.5% a month takes 28 years.
Do I still get the interest-free period if I pay the minimum?
No. That is the part most people get wrong. Once you carry any balance forward, new purchases start earning interest from the transaction date rather than from the statement date. The grace period comes back only after you have cleared the balance in full.
Is GST charged on credit card interest?
Yes, at 18% on the finance charge, on late fees, and on annual fees. It is not charged on the purchase amount itself, because you already paid GST on whatever you bought. On a ₹3,500 interest charge, GST adds ₹630.
Should I convert the balance to an EMI?
Usually yes. A card EMI at 14% to 18% a year is far cheaper than 3.5% a month, and a personal loan can be cheaper again. Check for a processing fee and whether the EMI conversion frees up your credit limit. Compare the total cost, not the monthly payment.
What about cash withdrawals on the card?
They are the most expensive thing a card does. There is no interest-free period at all, so interest starts the day you withdraw, and there is a cash advance fee of about 2.5% on top. Treat the cash limit as an emergency tool, not a source of money.