WordsInterest on an unpaid bill
Finance charges
The interest a card charges. Pay the whole bill by the due date and spends carry none; pay less and the interest-free period is lost, so interest runs from each purchase’s date on what’s unpaid, and on new spends until the old balance is cleared. Cash withdrawals carry it from the day you take the cash.
Each bank sets its own rate; HDFC Bank’s MITC, for example, charges 3.75 per cent a month, or 45 per cent a year, on most of its cards, plus GST. RBI’s rules have a bank explain its method with examples, and charge interest only on what’s left after your payments and refunds, not on the whole bill.
Where this comes from
- RBI, Credit Cards and Debit Cards: Issuance and Conduct Directions, 2025Paragraphs 5(16), 22, 23(3) and 23(6), as updated 1 October 2026
- HDFC Bank, Key Fact Statement cum MITC for Credit CardsVersion 4.12, 30 September 2026: Part I, A) ii. cash advance fee, iv. interest free period and v. finance charges
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Minimum due
The least you can pay
Pay this by the due date and there's no late fee. Interest still runs on the rest, and on new spends until it's cleared.
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The day your bill is made
The day each month's bill is made. RBI's rules give you at least a fortnight to pay, and let you move it at least once.
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Equated monthly instalment
Paying a purchase off in fixed monthly parts, usually with interest or a fee, at the shop or after the bill.
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Goods and services tax
18 per cent, added on top of a card's fees, interest and markups. The bank doesn't add it to what you spend.
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What happened to members, not financial advice. Offers change, so check with the bank. Terms of use