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Credit Card Interest Rate and APR

Credit Card Interest Rate and APR

APR and Interest Rates can be confusing. If you’re not sure how these work, this handy guide will help you understand everything you need to know.

Credit Card Interest Explained

What is interest?

Credit Card services allow you to borrow money. In return, Credit Card providers Charge you a percentage fee on the money you borrow.

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. This interest is charged on your outstanding balance and not on the total money you borrow.

What is APR?

APR stands for Annual Percentage Rate.

APR on Credit Cards

Even if you intend to keep a regular Credit Card repayment schedule, you should always check the APR to find out what you will pay each month. 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. By comparing APR, you can find the best Credit Card for your own uses. 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.

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


  • If your Credit Card has an APR of 40.2% you can calculate the daily interest rate by dividing 40.2% by 365. This gives you a daily APR of 0.11%
  • If you had an outstanding balance of Rs. 1000 on your Card you would be charged Rs. 33.04 in interest. This is calculated as taking the APR of 0.11% 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 Credit card charges and fees

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 for each individual. The additional benefits and rewards you get from using a Credit Card also impact which type of Credit Card is the best for you.

If you use your Credit Card to pay for purchases and will always make full monthly payments, you can focus on Membership Reward Points or travel loyalty programs when deciding which Card is for you. The Jet Airways Platinum Credit Card is 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 you will want to look for the lowest APR from a Card. Your credit score will affect the APR you can receive when applying for a Credit Card.


Credit and Charge Cards Explained

Has talk of interest, annual fees, rates and percentages left you feeling confused?

Our simple Credit and Charge Card guides are a great place to start.

How Credit Cards and Charge Cards work

Learn More

What is Credit Limit

Learn More

Earning Loyalty Points

Learn More

Earn Air Miles

Learn More

What is a Charge Card

Learn More

What Card fees am I expected to pay

Learn More

How to choose a type of Card

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American Express Benefits


Your security and protection are our priority. Our technology has been designed to give you peace of mind when using your card

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