By Vineet Kumar 
Trump’s Credit Card Interest Cap vs. India’s High Rates: How Do They Compare?
During his 2024 presidential campaign, US President-elect Donald Trump proposed a bold measure: capping credit card interest rates at 10% annually. “We can’t let credit card companies charge annual interest rates of 25 to 30 percent,” he declared. His proposal aims to relieve American consumers burdened by over $1 trillion in credit card debt.
In stark contrast, credit card interest rates in India soar as high as 53% annually, a jaw-dropping figure compared to Trump’s suggested cap. Although some banks in India offer cards with much lower interest rates, they are typically reserved for select individuals with stellar financial profiles.
The Highs and Lows of Credit Card Interest in India
Most credit cards in India come with monthly interest rates between 3% and 3.5%, translating to 36–42% annually. However, a few cards stand out for offering much lower rates.
For example:
IDFC First Bank Credit Cards: Interest rates range from 0.75% to 2.99% per month (9–36% annually). IDFC’s cards like Wealth, Select, and Classic have no joining or renewal fees. However, rates depend on factors such as credit score, income, and repayment history.
Axis Bank Burgundy Private Credit Card: Offers a rate of 1.5% per month (19.56% annually). But it comes with a hefty joining fee of ₹50,000 plus GST—waived only for Burgundy Private Savings Account holders.
HDFC Bank Infinia Metal Card: Charges 1.99% per month (23.88% annually). The ₹12,500 joining fee might seem steep, but this card is packed with premium perks for high-spending customers.
These lower rates sound tempting, but they’re typically available only to high-net-worth individuals (HNIs) or those with pristine credit histories. For the average cardholder, it’s a different story.
Cards with Sky-High Rates
Many credit cards in India charge monthly interest rates above 3.5% (42% annually), which can turn convenience into a debt trap if balances aren’t cleared on time.
Examples include:
Axis Bank Flipkart Card: Charges 4.4% per month (52.86% annually). Renewal fees are waived only if you spend ₹3.5 lakh or more annually.
HDFC Millennia Card: Interest stands at 3.75% per month (45% annually), with a ₹1,000 annual fee waived on spends above ₹1 lakh.
ICICI Amazon Pay Card: Rates vary dynamically, hovering between 3.5% and 3.8% monthly (42–45.6% annually).
The Price of Convenience
Even lower-interest credit cards are costly compared to other borrowing options, such as secured or personal loans. For example, someone carrying a ₹1 lakh balance on a card with 3.5% monthly interest will owe over ₹42,000 in interest annually—more than what many earn in a month.
To avoid falling into a debt trap:
1. Pay in Full: Always aim to clear your dues within the interest-free period.
2. Watch Spending: Use credit cards as a convenience tool, not a way to borrow for things you can’t afford.
3. Choose Cards Wisely: Opt for cards that align with your spending habits. For instance, frequent shoppers might benefit more from cashback offers than lower interest rates.
What India Can Learn
Trump’s proposed 10% cap highlights the stark disparity in consumer credit policies between India and the US. While a sweeping cap like this might seem improbable in India’s financial system, it raises an important question: Should more be done to make credit affordable for the average consumer?
In the end, whether in the US or India, responsible credit card use boils down to one golden rule: Spend only what you can repay. Credit cards can be a boon when used wisely—but they can just as easily turn into a financial burden when mismanaged.
