Question 1

What is the credit card interest rate in India?

Accepted Answer

Credit card interest rates in India range from 24% to 48% per annum (2% to 4% per month). Most major banks charge 36-42% annually. HDFC Bank: 3.6% per month (43.2% p.a.). SBI: 3.35% per month (40.2% p.a.). Axis Bank: 3.4% per month (40.8% p.a.). This is calculated on the outstanding balance from the date of transaction if not paid in full by due date.

Question 2

How does the credit card minimum payment trap work?

Accepted Answer

Credit card minimum payment trap: Banks require only 5% of outstanding (or Rs 200, whichever is higher) as minimum payment. If you pay only the minimum on a Rs 50,000 balance at 40% annual interest, it will take over 15 years to clear and cost over Rs 1.2 lakh in interest — more than double the original amount. Always pay more than the minimum to escape the debt trap.

Question 3

Avalanche vs Snowball method for credit card payoff?

Accepted Answer

Avalanche method: Pay minimum on all cards, put extra money on the highest interest rate card first. Mathematically optimal — saves the most interest. Snowball method: Pay minimum on all cards, put extra money on the smallest balance card first. Psychologically motivating — quick wins keep you going. For credit cards in India where all rates are similarly high (36-42%), avalanche usually wins. For very different rate cards, avalanche is clearly better.

Credit Card Payoff Calculator India — Avalanche vs Snowball

Credit Card Payoff Calculator

✅ Why Use This Calculator

4 Methods

Timeline

Interest Saved

Multi-Card

Minimum Trap

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❓ Frequently Asked Questions