Spent on your credit card this Diwali? A plan before the bill comes

Short answer: festive purchases on a credit card cost nothing extra only if you pay the total amount due by the due date. Pay less and the unpaid part carries interest of up to 3.75% a month (Federal Bank's terms), 18% GST is charged on that interest, and every new purchase loses its interest-free period. On a ₹60,000 festive bill, paying ₹3,000 a month takes about 50 months and costs about ₹90,000 in interest and GST. If you cannot pay in full, converting the purchases to EMI before the due date is usually far cheaper.

This article is part of our series on avoiding debt traps. If card dues are already one of several EMIs, read the credit card minimum due trap and try your own numbers in the loan consolidation calculator.

When will your festive spends have to be paid?

Each purchase lands on the statement after it is made, and is due on that statement's due date. SBI Card's terms put the interest-free period at 20 to 50 days, depending on when in the billing cycle you bought. A purchase made the day after your statement date gets the longest wait; one made the day before gets the shortest.

The interest-free period has one condition: SBI Card's terms say it "is not applicable if the previous month's balance has not been cleared in full". If you were already carrying a balance before Diwali, your festive purchases started charging interest the day you made them.

Before anything else, open your card app and write down three things: the statement date, the due date and the total amount due, for every card you used.

What does paying only part of the bill cost?

Three costs start once you pay less than the total due:

1. Interest on the unpaid amount. Up to 3.75% a month (45% a year) on Federal Bank cards; SBI Card's MITC for its Unnati card lists up to 3.50% a month (42% a year). RBI's rules say interest can be charged only on the amount still outstanding, after payments and refunds.
2. GST at 18% on that interest. On ₹2,250 of interest (one month at 3.75% on ₹60,000) that adds ₹405.
3. New purchases lose the free period. Anything you buy while a balance is carried starts costing interest immediately.

Paying less than even the minimum adds a late fee. Under RBI's rules a late fee can be charged, and the account reported to credit bureaus as past due, only once the payment is more than three days late. SBI Card's late fee on a total due above ₹50,000, for example, is ₹1,300.

Worked example: a ₹60,000 festive bill

Assume ₹60,000 of festive purchases on one card charging 3.75% a month, 18% GST on the interest and no new spending. Each month the charge is 3.75% × 1.18 = 4.425% of what is still owed: ₹2,655 in the first month.

The card EMI rows use SBI Card's published Pay in EMI terms: 16.50% to 19.50% a year for a credit score of 701 to 780 and 22% to 26% for 700 or below, a processing fee of 1% (₹600 here, plus GST) on 6- and 12-month plans, and 18% GST on the interest. Your card's offer may differ.

₹3,000 is the first minimum due on this bill under SBI Card's formula (5% of the outstanding). After 12 months of paying ₹3,000 you have paid ₹36,000 and still owe about ₹54,700. If you pay only the minimum each month as it shrinks, the bill barely moves: at 4.425% a month in charges, a 5% minimum cuts the balance by only about 0.6% a month.

This is simplified: banks charge interest daily from each transaction date, and any new spending or late fee makes the numbers worse. Use your own card's rate from its MITC or statement.

What to do before the due date, in order

1. Pay the total amount due if you can. It is the only option that costs nothing. Use savings meant for spending, not an emergency fund you will need again next month.
2. If you cannot, convert the big purchases to EMI before the due date. Many banks let you convert only transactions on the latest statement. SBI Card's Pay in EMI, for example, covers retail purchases from the latest bill, excludes cash withdrawals and fees, and can be cancelled until 4 days after the due date. Ask for the rate, processing fee, GST and foreclosure charge in writing (SBI Card's foreclosure fee is 3% of the outstanding principal).
3. Pay the rest of the bill in full. Convert only what you cannot pay, so the remaining balance does not carry interest.
4. Never pay less than the minimum due. That adds a late fee and, after three days, a past-due entry on your credit report.
5. Stop new spending on that card until the balance is cleared, because new purchases now carry interest.
6. Move your billing cycle if it does not match your salary date. RBI requires card issuers to let you change the billing cycle at least once. A due date a few days after payday makes paying in full easier every month.

Do not take an app loan or a payday loan to pay the card bill. That swaps a card balance for a loan that is due in one go on your next salary, often with a fee for each rollover.

When is a personal loan the better fix?

For one festive bill, usually not: paying it off over a few months or converting it to EMI is simpler and cheaper than a new loan with its own processing fee. A personal loan makes sense when:

• card balances have been carried for months, on more than one card;
• the cards sit alongside app loans or other personal loans, and the EMIs together take more than about 40% to 50% of your take-home pay;
• you are already using one card, or a loan, to pay another.

Then one loan at a bank rate can replace all of them. A ₹2 lakh balance across three cards is worked through on our credit card consolidation page, and how to merge multiple EMIs into one shows the wider case.

How many credit cards can AdvanceCred merge?

AdvanceCred works on cases with up to 5 credit cards, together with up to 5 app loans and personal loans in total and up to 1 payday loan. These are AdvanceCred's own case limits. Within them, the bank or NBFC still checks your income, existing EMIs and credit report and decides approval, amount, rate and tenure.

How AdvanceCred can help

AdvanceCred is a credit advisory and loan intermediation firm based in Mumbai. It is not a lender. If the festive bill has joined other card dues and loans, an advisor goes through your statements with you, checks whether a debt consolidation loan from a partner bank or NBFC can clear them in one go, and explains the EMI, fees and total cost before you apply. Leave your details below.

Sources

Checked on 7 November 2026 unless dated otherwise. The ₹60,000 bill, payments and "no new spending" are assumptions for illustration; months, totals and EMIs are AdvanceCred's own arithmetic (monthly compounding, interest plus 18% GST each month; card EMI by the standard reducing-balance formula). AdvanceCred's case limits are its own policy (set 30 October 2026).

• Federal Bank, Credit cards Most Important Terms and Conditions (finance charge up to 3.75% a month, 45% a year; new transactions attract interest when less than the total is paid), checked 4 November 2026: federal.bank.in
• SBI Card, Unnati card Most Important Terms and Conditions (interest-free period 20 to 50 days, not applicable if the previous balance was not cleared in full; finance charges up to 3.50% a month, 42% a year; minimum amount due 5% of the outstanding or ₹200; late payment charges by slab, ₹1,300 above ₹50,000): sbicard.com
• SBI Card, Pay in EMI terms and conditions (10% to 26% a year from 11 September 2026 by credit score band; processing fee 1% or ₹2,000, whichever is lower, waived on 24 and 36 months; retail purchases from the latest bill only; cancellation until the due date plus 4 days; foreclosure fee 3% of outstanding principal; GST at 18%): sbicard.com
• Reserve Bank of India, Amendment to the Master Direction – Credit Card and Debit Card – Issuance and Conduct Directions, 2022, RBI/2023-24/132, 7 March 2024 (option to change the billing cycle at least once; interest only on the outstanding amount; late fees and past-due reporting only after more than three days): rbi.org.in
• IndusInd Bank, "What is the GST rate for a credit card?" (GST at 18% on card interest, fees and late charges), checked 4 November 2026: indusind.bank.in