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RBI Raises Repo Rate: Impact on Credit Card Users Explained
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News18•07-10-2026, 11:43
RBI Raises Repo Rate: Impact on Credit Card Users Explained
- •The Reserve Bank of India increased the repo rate by 25 basis points to 5.50 percent, marking its first hike since February 2023.
- •Credit card interest rates do not automatically increase with the repo rate, as they are independently set by individual card issuers.
- •Consumers who pay their credit card bills in full by the due date will not be affected by the rate hike.
- •Cardholders carrying an unpaid balance should monitor communications from their issuers regarding potential changes to interest rates or charges.
- •Credit card purchases converted into EMIs may or may not become more expensive depending on whether the arrangement has a fixed interest rate.
Key Questions Answered
No, a repo-rate hike does not automatically or immediately increase your credit card interest rate. Credit card rates are independently set by individual card issuers based on their terms and conditions, rather than being directly linked to the repo rate.
If you pay the entire outstanding amount by the due date, the repo-rate hike means you will not suddenly start paying interest on your purchases.
Not necessarily, as the impact depends on the specific terms of your EMI facility. While some EMI arrangements feature fixed interest rates, terms vary across issuers, meaning a repo-rate hike does not automatically make every credit card EMI more expensive.
