What is Debit Interest on Credit Card?

Hi. I have a credit card, which I got through the HDFC Bank. I recently found out about a term called debit interest in credit card. A friend of mine has a credit card from the same bank. Hence, I asked him about the debit interest on credit cards. He gave me a clear explanation of the subject. Let me share that information with you.

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What is debit interest in credit card?

In simple terms, debit interest on credit cards is the interest rate, which is charged for the amount, which is carried over to the next month of the billing cycle. This happens in cases when you do not pay the complete bill amount on or before the due date. Let me give you an example to help you understand better. Suppose your total outstanding dues are 15,000 rupees and you only pay 10,000 rupees till the due date. Then, the remaining 5,000 rupees will be carried forward to the next month and you will have to pay interest on that amount until you clear the dues.

The interest rate charged depends on certain factors. They are as follows:

1. The Bank

2. Usage of the card

3. Relationship with the bank

I hope my answer helps you to understand the debit interest credit card in a clear manner.

Holding a credit card is a boon but if we don’t use it wisely and don’t make regular payments, we can face many problems. I had a friend who was quite irregular in waiving off his credit card dues and this caused debit interest on credit card. I will tell you what it actually is. Debit interest on a credit card refers to the interest charged when the cardholder carries a balance on their card from month to month. Essentially, debit interest is the interest charged on the unpaid balance on the credit card.

What is debit interest on credit card?

When a credit card balance is carried over from one month to the next, the issuer will typically charge interest on the unpaid balance. The interest rate charged can vary depending on the issuer and the cardholder's creditworthiness. Generally, the interest rate charged on credit card balances is higher than other types of loans or credit, such as personal loans or mortgages.

Debit interest can accumulate quickly and add up to a significant amount over time, particularly if the cardholder only makes the minimum payment each month. For this reason, it is generally recommended that cardholders pay off their balance in full each month to avoid incurring interest charges.

In some cases, credit card issuers may offer a promotional period with 0% interest on purchases or balance transfers for a limited time. However, it is important to read the terms and conditions carefully, as these promotional offers often come with caveats such as balance transfer fees, annual fees, or restrictions on how the card can be used.

It is also important to note that some credit cards may charge additional fees, such as cash advance fees, foreign transaction fees, or late payment fees, in addition to debit interest charges.

Cardholders should aim to pay off their balance in full each month to avoid incurring interest charges. It is important to read the terms and conditions of any credit card offer carefully, and to be aware of any additional fees that may be charged in addition to debit interest on credit card.