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Credit card interest and minimum due explained

Updated 30 Oct 2026 · by SwipeWise editorial team · how we write

Paying only the minimum amount due keeps a card account out of default, but it does not stop interest. This guide sets out what RBI’s directions require issuers to disclose, how two large issuers say they calculate the charge, and a worked example copied from SBI Card’s own published schedule.

Rates and fees differ by issuer, card and date. The figures below come from the SBI Card MITC and the HDFC Bank MITC as they stood when we accessed them (see Sources) and may have changed since. Check the MITC for your own card.

Terms RBI defines

RBI’s card directions define these terms, and issuers use them in their MITC:

  • Total amount due: the amount payable as per the statement generated at the end of a billing cycle, net of credits received during the cycle.
  • Minimum amount due: “the minimum amount of money, as a part of the total bill amount, that a cardholder has to pay to not be treated as an overdue bill.”
  • Interest-free credit period: the time from the date of transaction to the due date, free of interest “subject to the payment of entire outstanding on or before the payment due date.” The MITC must state that this period is suspended if any balance of the previous month’s bill is outstanding.

What the rules say about charging interest

RBI’s directions (the 2022 Master Direction, and for commercial banks the 28 November 2025 Directions that replaced it) include these points:

  • Interest is levied only on the outstanding amount, adjusted for payments, refunds and reversed transactions. If you part-pay or do not clear the total due by the due date, the interest-free period is lost and interest may be charged from the date of transaction on the outstanding amount, not on the total due.
  • Late payment charges are levied only on the outstanding amount after the due date, and an account is reported as past due or charged late fees only when it stays past due for more than three days. The days past due are still counted from the due date on the statement.
  • The minimum due must be set so there is no negative amortisation, and unpaid taxes and charges must not be capitalised, that is, interest cannot be charged on them. RBI’s own illustration: ₹10,000 outstanding at 2% a month needs ₹200 interest plus an indicative ₹50 of tax and charges, so the minimum due cannot be less than ₹250.
  • Every statement must carry a warning that paying only the minimum can stretch repayment over months or years with compounded interest.

How SBI Card and HDFC Bank calculate it

Both MITCs give the same daily formula: annual rate (monthly rate multiplied by 12), times days, divided by 365, times the amount.

  • SBI Card: finance charges up to 3.75% per month (45% a year) from the transaction date if the balance is not paid in full. The minimum due is 100% of GST, EMI, fees and finance charges, plus overlimit amount if any, plus 2% of the remaining balance (the statement-payment section adds “or ₹200, whichever is greater”). Per its MITC, a ₹10,000 balance paid down at the minimum (floor ₹200) would take up to 52 months to clear.
  • HDFC Bank: 3.75% per month (45% a year) for most variants, and 1.99% per month (23.88% a year) for Infinia, Diners Black and a few other variants. The minimum due includes GST, EMI, fees, and either 5% of (finance charge plus retail spends plus cash advance) or, where that is lower than the finance charge, 100% of the finance charge plus 5% of retail spends and cash advance (effective June 2025, per the MITC).
  • Taxes are added on top. HDFC Bank’s illustration applies GST at 18% to interest and the late payment charge; SBI Card’s MITC says “applicable taxes”, and its example taxes a ₹500 fee at ₹90, which is 18% (see the GST guide).

Worked example: SBI Card’s own illustration

This is Example 3 in the SBI Card MITC. Statement date is the 2nd of each month. Rate used: 3.75% per month, so (3.75 x 12) = 45% a year.

  • 5 March: annual fee ₹500 and taxes ₹90 are charged.
  • 15 March: online purchase of ₹6,000.
  • 2 April statement: total amount due ₹6,590. Minimum due ₹710 = ₹90 (GST) + ₹500 (fee) + 2% of ₹6,000 (₹120).
  • The cardholder pays only ₹710 on the due date, 22 April. The fee and tax are cleared first, so ₹120 reduces the ₹6,000 purchase and the balance becomes ₹5,880.

Interest to the 2 May statement, as the MITC computes it:

  • ₹6,000 from 15 March to 21 April, 38 days: 45% x (38 / 365) x 6,000 = ₹281.10
  • ₹5,880 from 22 April to 2 May, 11 days: 45% x (11 / 365) x 5,880 = ₹79.74
  • Total interest: ₹360.84

So paying ₹710 of ₹6,590 left ₹5,880 of purchases, and ₹360.84 of interest had built up by the 2 May statement. Interest ran from the purchase date, not from the statement date. The MITC does not show GST on that interest; per its terms, taxes are added to fees and interest.

Worked example: HDFC Bank’s illustration with late fee and GST

From the HDFC Bank MITC (version 4.17, October 2026): ₹15,000 spent on 10 April and ₹5,000 on 15 April, statement on 18 April with total due ₹20,000 and minimum due ₹1,000. Only ₹2,000 is paid on 12 May, a ₹1,000 purchase follows on 14 May, ₹15,000 is paid on 15 May, and the next statement is on 18 May.

  • Interest at 3.75% per month, five slices: ₹591.75, ₹48.08, ₹184.93, ₹14.79 and ₹6.16. The MITC totals them as ₹845.75; the printed slices add to ₹845.71, and the first slice recomputes to ₹591.78 rather than ₹591.75, so the differences are rounding in the source.
  • Late payment charge: ₹900 (HDFC’s table charges ₹900 where the total due is ₹10,001 to ₹25,000; here it is ₹20,000)
  • GST at 18% of interest plus late charge: 18% x (845.75 + 900) = ₹314.23
  • Principal outstanding: ₹4,000 (₹1,000 fresh spend plus ₹3,000 carried)
  • Total amount due: 845.75 + 900 + 314.23 + 4,000 = ₹6,059.98 (the MITC prints ₹6,059.99)

The example shows how a ₹2,000 part-payment on a ₹20,000 bill turned into ₹1,745.75 of interest and late charge, plus ₹314.23 tax, within one cycle.

If you cannot pay in full

Both issuers offer to turn a balance or purchase into instalments. HDFC Bank’s MITC describes Auto EMI on its Easy EMI card (transactions of ₹10,000 or more) as 9 months at 20% a year plus a ₹99 plus GST processing fee. Compare that with the revolving rate above and read our EMI guide. Cash withdrawals carry a fee and interest from the withdrawal date; see cash advance costs.

What to check in your own MITC

  • The monthly and annual rate, and for which transactions it applies.
  • The date from which interest is counted when you part-pay.
  • The minimum due formula.
  • The late payment fee table and the number of days of grace.
  • Whether GST is shown on interest.

This is general information, not financial advice. See how billing cycles and due dates work. Our calculator estimates rewards only and does not net them against interest.

Sources

Try it with your own numbers. Open the calculator

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