Credit Card Interest Rate | American Express India

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Interest Rate and APR

APR and Interest Rates can be confusing. Here's a guide that will help understand how these work

What is interest?

Credit card services allow one to borrow money and in return for the services charge a fee.

This fee is the interest rate that is applied if you don't pay the whole balance outstanding on your Card in the given month. The interest is always charged on the outstanding balance and not on the total amount.

What is APR?

APR stands for Annual Percentage Rate. It is basically the procedure through which the annual interest rate is calculated for the amount of money you pay on money borrowed. It is a useful tool if you want to compare a variety of loans-including Credit Card payments and mortgages.

Effective APR
Effective APR is the interest rate you pay coupled with annual account fees and transaction fees that are added to the balance. This is the best estimation of the total costs for a balance on your American Express Credit Cards

Fixed APR
A Fixed APR means that the Credit Card provider has to provide 45 days' notice before change of interest rate. The new interest rate will only apply for purchases after the new rate change is applied.

Variable APR
A Variable APR has flexible interest rates, based on index interest rates. This is combined with the Credit Card issuers own rates and varies based on promotional offers. It also depends on benchmark index.

APR on Credit Cards

Always check the APR to find out the interest rate. Cards with a lower APR tend to have less reward and loyalty programs but this can be a useful trade-off for some consumers.

How can I calculate the interest on a Credit Card balance?

The easiest way to calculate Credit Card interest is by using the APR. Start with comparing APR, and you'll be able to identify the best Credit Card for you. Different APRs apply to different uses such as, cash withdrawals, balance transfers and purchases. If you intend to use your Credit Card primarily for purchases, then you will want to look for the lowest APR on purchases

Sometimes, monthly or daily interest rates are also used by companies to calculate the interest on outstanding balances.

Example
  • If your Credit Card has an APR of 19% you can calculate the daily interest rate by dividing 19% by 365. This gives you a daily APR of 0.05%
  • If you had an outstanding balance of `1000 on your Card you would be charged `15.62 in interest. This is calculated as taking the APR of 0.05% times the monthly billing days (30)
  • The more of your outstanding balance you repay each month, the less interest your Credit Card will accrue
  • American Express Credit Card Interest Rates

    American Express Credit Cards have different interest charges and transaction fees. Your Credit Card arrangement specifies the charges that apply to your purchases, balance transfers and cash withdrawals.

    When you pay a part of your outstanding balance the transactions with lower interest rates are paid off first.

    If you fail to make a repayment or spend more than your agreed spending limit, you will be charged a penalty interest rate .

    Find out more about American Express charges and fees on Credit Cards

    Do Charge Cards have Interest Rates?

    Charge Cards do not have interest rates as they do not extend credit to you. The full balance on a Charge Card is taken out of your bank account at the end of each month. This means you have no outstanding balance at the beginning of the next month.

    How do I get the best Credit Card interest rate?

    Credit card interest rates vary from person to person. The additional benefits and rewards you get from using a Credit Card impacts which type of Credit Card is the best for you.

    If you use your Credit Card to pay for purchases and always make full monthly payments, you can focus on Membership Reward Points or travel loyalty programs. The PAYBACK and Jet Privilege Miles Credit Cards are likely to be perfect.

    If you are sometimes unable to make the full payment on your Credit Card or would like to have greater flexibility with payments, then look for the lowest APR from a Card.

    Choose a card based on your lifestyle habits and get the best of benefits.

    Charge Cards
    Charge Cards are perfect if you have cash available with which you can pay off the balance in time. The balance is paid directly from your bank account on a specific date each month-so you don't have to worry about interest Charges.

    Like Credit Cards, with charge cards too you can gain Membership Reward Points to spend on a variety of benefits. Our Platinum Card gives bonuses in a single Charge Card.

    Both Credit Cards and Charge Cards will help you build a Credit rating. Before you apply for a Card, look at the interest rates, rewards and bonuses to see what suits you the most.

    Can I apply for a Credit Card?

    The key requirements for American Express Credit and Charge Cards (and most Credit Cards in India) are:

    • You must be of legal age
    • You must have Indian residency status
    • You must have an Indian Credit file. You will have a Credit file if you have owned a Credit Card or Charge Card from any other provider
    • You must not have filed for bankruptcy in the past 7 years.

    How does my Credit score affect my application?

    Your Credit score is the Credit report provided by CIBIL.

    Your history with managing credit, defaults or missed payments may influence your credit score.

    Your Credit score determines the interest rates you will be offered on applying for a Credit Card. For good credit history, you receive better interest rates and higher levels of Credit spending. You can find your Credit score by visiting the CIBIL website.

    How do I apply for my Credit Card online?

    You can apply for a Credit Card by visiting our Credit Card section here and finishing the online application form. It takes just ten minutes. You are asked to provide your address, income and bank details. You then receive confirmation post which you are required to send us documents to prove your legal status and identity.

    Application processing typically takes 2-3 weeks from submission. You will be notified directly upon approval or denial of your Credit Card application.

    To help the process please double check your entries and make sure that you have all the necessary documents ready .

 
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