Leading Credit cards will now pinch your pockets more as leading banks have hiked the rate of interest charged on card dues by 1-3% per month in the last two-three months.
Credit card companies usually have a bill cycle of 30-45 days, beyond which they charge monthly interest rate.
Market leaders like ICICI Bank, SBI cards and ABN Amro have already hiked rates on review of their cost of funds or a routine need to align with the industry.
By far, ICICI is the market leader in the credit card business with over 80 lakh credit cards against the total market size of 2.3 crore cards.
Justifying the hike, Sachin Khandelwal, credit card business head, ICICI Bank told PTI that interest rates on home loans had increased by 3-4% and the rates on credit cards had not been revised for almost three years.
“We have revised the rates after reviewing our cost of fund and also to align with the industry which is charging in the range of 3-3.25% per month,” they said.
Its nearest private sector competitor HDFC Bank, however, is unlikely to hike the rates in the near future.
“We continue to closely review the industry trends but have no immediate plans to raise the interest rates on credit card dues”, Bank’s official spokesperson said.
HDFC currently charges interest in the range of 2.75-2.95% per month for different category of customers.
As quoted on Business Standard News