ICICI Credit Card Interest Rates

Interest calculation and the way it is levied on outstanding credit card dues is a bit different from other loan facilities. Hence, every ICICI cardholder must know how the interest is calculated, which credit card transactions attract interest and other details to make sure their credit card bill is in control.

Interest Charged by ICICI Bank on Various Credit Cards

The interest charged by ICICI Bank varies from one credit card to another. Listed below are various credit cards offered by the bank along with their monthly percentage rate of interest and annual percentage rate of interest.

Interest rate changes periodically based on usage patterns, repayment behaviour and credit utilisation patterns.

Mentioned below are all the important aspects related to the interest rate charged by ICICI Bank on the different credit cards it offers.

Interest rates vary rate not only from one bank to another but also from one credit card to another, even though the card is issued by the same bank.

ICICI Bank levies interest charges when the total amount due on a credit card is not paid on or before the payment due date. In such cases, interest will be charged on the total due amount from the transaction date and also on all new transactions till the time the previous outstanding is cleared in full.

Interest is also levied when you withdraw cash using your ICICI credit card. For cash withdrawals or cash advances, interest will be charged from the date of withdrawal till the amount is paid back in full. Even when you repay the cash advance on or before the due date, the interest charge is applicable.

ICICI Bank charges interest rates from 1.25% per month to 3.50% per month depending on various factors, including the cardholder's credit history, purchase behaviour, repayment pattern and others. Though the rate of interest is typically disclosed in the terms and conditions documents of a credit card, it may change at any point in time based on the bank's sole discretion. Credit cardholders may or may not be intimated about the same as per the bank's policy.

How Are Credit Card Interest Rates Calculated by ICICI Bank?

ICICI Bank charges interest at the monthly percentage rate on all the applicable transactions from the date of the transaction till the amount is cleared in full. Interest charges will be debited to the cardholder's account on a monthly basis till the time they are cleared in full.

When you carry forward any outstanding due from the previous month, the interest charge will be calculated using the average daily balance method. The interest rate in this case is applicable to balanced carried forward and to fresh billings.

When you withdraw cash using your ICICI credit card, the interest charge will be calculated using the same method.

If you choose to pay an amount less than the total outstanding on your credit card, the entire due will attract finance charges along with all the new transactions till the time the previous dues are cleared in full.

ICICI Bank uses a standard formula to calculate the interest rate in case all the previous dues are cleared, and the account does not hold any outstanding amount.

Situations Affecting Interest Rates on Credit Cards

Interest on credit cards is typically incurred in various scenarios, affecting the total amount owed:

1. Late Payments: Failing to pay the outstanding balance by the due date on your credit card statement leads to the application of interest on the unpaid amount.
2. Minimum Payments: Opting to make only the minimum payment instead of paying the full outstanding balance results in interest accruing on the remaining amount.

1. Partial Payments: When you pay less than the total outstanding due, the remaining balance becomes subject to interest charges.
2. Cash Advances: Withdrawing cash from an ATM using your credit card incurs immediate interest charges, often at higher rates than regular transactions.
3. Carrying Balances Forward: If you carry over an unpaid balance from the previous billing cycle, interest will be applied to this carried-over amount.

It's essential to settle the complete outstanding balance on your credit card before the due date to avoid interest charges for that billing cycle. Understanding these scenarios can assist users in managing their credit card payments more effectively and reducing interest expenses.

Factors Influencing Credit Card Interest Rates

Your personal credit score stands out as the primary determinant considered by credit card companies when determining the interest rate on your credit card. However, several other factors contribute to this rate, as outlined below:

1. Payment History: Your repayment track record reflects your ability to settle dues and your overall creditworthiness. Consistent and timely repayments with minimal or no outstanding balances can elevate your credit score and potentially lead to a lower interest rate. Conversely, defaults or late payments may lower your credit score, resulting in higher interest charges on your credit card.
2. Outstanding Balances: The amount you owe, relative to your credit limit, also impacts your credit card interest rate. Credit card companies assess your credit utilisation ratio, which is the proportion of available credit you have utilised. A lower utilisation ratio suggests responsible financial management, potentially leading to a lower interest rate. Conversely, higher utilisation ratios may attract higher interest charges on your credit card.

In addition to these factors, the length of your credit history and the diversity of credit types you possess can also influence the interest rate applied to your credit card.

Which ICICI Bank Credit Card Transactions Attract Interest Charges?

If you pay the Total Amount Due (TAD) on your ICICI credit card before the due date, the interest charges will not be applied. However, finance charges will be levied on the following cases.

1. When you do not pay your total amount due before the due date
2. When you pay only the minimum due amount, you carry a part of the total outstanding amount to the next billing cycle.
3. When you avail of the cash advance feature or withdraw cash using your ICICI Bank credit card.

ICICI Credit Card Interest-free Period

ICICI Bank provides a grace period for all credit cardholders during which the card transactions on the card do not attract any interest. Hence, the period is termed an interest-free period. In simple terms, a credit card interest-free period is the time between the transaction date and the payment due date. It thus varies for every transaction made on your ICICI credit card.

Typically, ICICI offers an interest-free period ranging from 15 to 45 days. If you make the payment within the period, i.e., on or before the due date, no interest will be charged provided you don't have any carry-forwarded balance from the previous statements.

Let's see how ICICI calculated credit card interest-free. For instance, if your ICICI credit card billing period is from 15th April to 15th May, the payment due date will be 2nd June, considering a grace period of 45 days.

Assuming that you have paid your previous month's due on time the grace period for different transactions conducted during the billing period is as follows -

1. If you made a purchase on 24th April, the interest-free period for your transaction would be 40 days, i.e., from 24th April to 2nd June.
2. Similarly, if you made a card transaction on 14th May, the grace period would be from 14th May to 2nd June, which is 20 days.

Thus, the grace period varies from one transaction to another depending on the date of purchase. However, if you carry forward the previous month's balance, there won't be any interest-free period. Also cash advances or cash withdrawals are charged from the date of withdrawal till they are paid back in full. Hence there is no interest-free period for cash advances.

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