Major credit cards hike interest rates

Credit cards will now pinch your pockets more as leading banks have hiked the rate of interest charged on card dues by one to three per cent per month in the last two to 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. Giving rationale of the hike, ICICI Bank Credit Card business head Sachin Khandelwal said that interest rates on home loans had increased by three to four per cent 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 three to 3.25 per cent per month," they said. Its close 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. Foreign banking major ABN Amro had revised the rates about three months back, but it was not across the board.
SBI Cards, a joint venture between State Bank of India and GE Money, too has increased the interest rates from 2.99 to 3.1 per cent based on spending pattern and payment behaviour of the consumer.