How credit cards actually work
A credit card gives you a revolving line of credit. You spend; the bank pays the merchant; you owe the bank. If you pay the full statement balance by the due date, you owe nothing extra, you got an interest-free loan of up to 45 days. If you pay only the minimum (5% to 10%), interest kicks in on the entire balance from the transaction date, typically 36% to 42% per year. Cash withdrawals on a credit card start charging interest immediately, with no grace period.
Spend ₹50,000 on a card. Pay only the ₹2,500 minimum due. The ₹47,500 balance accrues interest at ~3.5% per month plus 18% GST on the interest. By month six, you owe roughly ₹58,000, more than you originally spent. This is how credit card debt becomes the most expensive debt most Indians ever carry.
Treating the minimum due as a payment plan. It is a debt-trap accelerator. Pay the full statement balance every month, no exceptions.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.