Credit Card Interest Rate


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.






What is Credit Card Interest?


Credit Card interest rate also referred to as Monthly Percentage Rate, varies from one Card provider to another and may also vary across different Credit Cards from the same provider. It is an essential factor to consider before signing up for a Credit Card. Here is all the information about the Credit Card interest rate and how interest is charged on your Credit Card.


What is Credit Card Interest Rate?


Credit Card services allow you to borrow money. This money is loaned to you at a fixed rate of interest, also called the Credit Card interest rate. For Credit Cards, interest is expressed as a monthly rate known as the Monthly Percentage Rate, or MPR. Interest is payable at the Monthly Percentage Rate on all Charges from the date the Cardmember incurs the transaction until they are fully repaid.

For more information on MPR, please refer our MITC


How is Credit Card Interest Rate Calculated?


Interest is payable at the monthly percentage rate on all Charges from the date the Cardmember incurs the transaction until they are fully repaid, except where an interest free period applies.  Interest, if payable, is calculated by multiplying:


  • The daily balance of Charges on which interest is payable; by
  • The daily percentage rate (monthly rate multiplied by twelve divided by 365); and then 
  • Adding up the daily interest Charges for the applicable period.


In case the payment made towards the monthly statement of account for any particular month is less than the total interest and Applicable Taxes billed in that particular statement, the remaining interest amount will get added to subsequent month’s outstanding and such shortfall in interest will attract interest on interest.

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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 to be fully paid at the end of each month. This means you have no outstanding balance at the beginning of the next month.


When is the Interest on a Credit Card Charged?


If you pay your total due amount in full before the Payment Due Date, no Credit Card fee is applied to your account. However, you might have to pay the interest in the following scenarios:

  • When you skip paying the Credit Card bill by the Payment Due Date
    If you don’t pay the Credit Card bill altogether, you will be charged interest on the outstanding amount as well as on any new transactions made after the due date, till the previous balance is cleared. Also, a late payment fee will be applied to your account.
  • When you pay only the Minimum Due amount
    The interest will be charged not only on the balance amount but also on all the fresh purchases made until the previous amount is paid in full.
  • When you pay less than the Minimum Due amount
     Not just the balance, but full amount will attract interest along with any new purchases made till the time the previous amount is paid in full.

  • When you withdraw cash using a Credit Card
    You can also use your Credit Card to withdraw cash American Express doesn’t charge an interest on the Cash withdrawal. 


How do I get the best Credit Card interest rate?


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 always make full monthly payments, you can focus on Membership Rewards Points or travel loyalty programs when deciding, which Card is for you. The Platinum Travel 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 MPR from a Card. Your credit score will affect the MPR you can receive when applying for a Credit Card. 


What exactly is a ‘Credit Card minimum repayment’?


Credit Card minimum repayment or Minimum Due amount is the minimum amount you need to pay to your Credit Card provider on or before the Payment Due Date to keep your account regular and avoid incurring any late payment fees as this might adversely impact your credit score. It is a small percentage of your total outstanding amount each month. If you pay only the Minimum Due amount by the Payment Due Date of your Card, you can only avoid the late fees. Interest will still be applied to the outstanding amount. 


Useful terms


  • Opening Balance
    The balance on your account at the beginning of a particular statement period.  


  • Closing Balance
    The amount you owe at the end of a particular statement period.


  • Minimum monthly repayment
    The minimum you have to pay each statement period. It is not recommended as a long-term solution because if you make only the minimum monthly repayments, you will pay more interest and it will take you longer to pay off your balance.


  • Minimum payment due date
    The final day by which you have to pay at least the minimum monthly repayment amount to avoid late payment charges.

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


What is Credit Limit


Earning Loyalty Points


Earn Air Miles


What is a Charge Card


What Card fees am I expected to pay


How to choose a type of Card



Explore Our Credit Cards

American Express Offers a range of Credit Cards with different rewards and benefits tailored to your lifestyle and interests.