APR on Credit Cards: What the Number Actually Means
Updated 18 July 2026
Indian issuers usually advertise a monthly interest rate, which can undersell how expensive it actually is until you see it annualized.
Monthly rate to annualized
A monthly rate of 3–3.75%, compounded monthly, works out to an effective annual rate commonly in the roughly 42–52% range once compounding is accounted for — noticeably higher than simply multiplying the monthly rate by 12. This is the number that matters for comparing a credit card's cost to a personal loan or other credit product quoted in annual terms.
What it applies to, and what it doesn't
This rate applies to any revolved balance, cash advances (from the transaction date, with no grace period), and EMI conversions carry their own separate, usually lower, disclosed rate. It never applies to a balance paid in full by the due date — the rate is only relevant once you're carrying a balance forward.