Defaulting credit cards will attract 49% interest now

Supreme Court on Tuesday allowed MNC banks to charge hefty penal interest up to 49% on defaulted credit card payments, ending the respite that lakhs of card holders have had since September last year when the National Consumer Disputes Redressal Commission capped the penalty at 30%.

The SC stayed the apex consumer forum's directive to banks not to charge more than 30% interest on defaulted payments on credit card purchases. The SC had last year refused to heed the appeal of banks against the NCDRC's order.

A Bench comprising Justices B N Agrawal, G S Singhvi and Aftab Alam suspended on Tuesday the relief to card holders on a plea by a coalition of foreign banks - Citibank, HSBC, American Express and Standard Chartered - that their business was suffering immensely because of the "unwarranted" cap on the quantum of penal interest.