Citibank, in its petition, says,
The facility of credit cards is availed of without any interest for a certain stipulated period and it is only after the expiry of that period that interest is levied on a credit card account for non-payment or late payment of dues. It is also relevant to note that credit card transactions de-facto constitute unsecured credit availed of.But the question is, how much return (or interest rate charged) would a bank want for unsecured credit through credit cards? Also, the so called ‘stipulated period’ varies with respect to one's date of purchase and payment due date, and can be as less as one day as well.
Banks would have ‘n’ reasons to justify this, but people, bit cautious on your credit card spending from now!
More details here.
- Credit card and effective interest rate