The issue of "credit card interest rates" in Thailand, which many consider excessively high or complicated to calculate, is something all credit users must clearly understand to avoid spiraling into unmanageable debt.
Of course, credit facilities with "pre-approved loan limits" are not limited to credit cards; they include cash cards and personal loans. To use them wisely, we must clearly understand their terms, or else the debt will balloon.
To illustrate clearly, we have an example from the Bank of Thailand (BOT). If we have a credit card with cash advance (personal loan) access and withdraw 15,000 baht at an interest rate of 25% per year, and at the end of the month we pay only the minimum 3% per month, about 450 baht, continuing this way, it will take 18 years and 3 months to clear the debt.
The principal is 15,000 baht, but the interest amounts to 29,000 baht.
See how a small debt can become large if we don’t understand the “loan” we are using? Here are 10 essential facts about credit cards, cash cards, and personal loans compiled by Thairath Money.
For credit cards, there is “no interest” if you pay the full amount of your spending by the due date. Typically, there is a grace period of around 45-55 days, depending on each bank’s terms. For cash cards and personal loans, if the financial institution offers a 0% interest promotion, it usually specifies the duration in months. If you fail to repay on time, interest will be charged.
The Bank of Thailand sets maximum interest rate ceilings for regulated loans, mainly divided as follows:
Even though there are maximum interest rate caps, when using credit cards, cash cards, or personal loans, if we miss payments or pay only the minimum, interest is calculated daily.
Have you ever enjoyed shopping on credit only to receive a bill at month-end that you can’t fully pay, so you choose to pay the minimum? You might overlook how much interest you’re being charged, which is calculated daily. For example,
Arm, has a credit card with billing cycles ending on the 17th each month and payment due on the 2nd of the following month.
- On 18 May 2026, Arm charged 10,000 baht for eyeglasses.
- The billing cycle ends on 17 June 2026.
- Payment is due by 2 July 2026, and Arm chooses to pay the minimum 10%, or 1,000 baht.
Although Arm’s principal balance is 9,000 baht, on the next billing cycle, 2 August 2026, he must pay 260.38 baht in interest accrued since the eyeglasses purchase date, composed of two parts:
1) Interest on the full principal of 10,000 baht amounting to 197.26 baht,
calculated as 10,000 (principal) x 16% (interest rate) x 45 days (from 18 May to 1 July) divided by 365 days.
2) Interest on the remaining balance of 9,000 baht amounting to 63.12 baht,
calculated as 9,000 (remaining debt) x 16% (interest rate) x 16 days (from 2-17 July) divided by 365 days.
Similar to point 3, if we pay “after the due date,” we must pay additional interest, often more than expected. For example,
- On 2 March 2026, Som-O, charged a new mobile phone for 80,000 baht.
- The payment due date was 15 April 2026, but Som-O forgot and paid on 30 April 2026.
Therefore, the credit card issuer charges daily interest (16% per year) from 2 March 2026 to 30 April 2026, totaling 60 days. Som-O must pay an additional 2,104 baht (80,000 x 16% x 60 / 365). The issuer also had to send staff to call for payment. Som-O must pay an additional debt collection fee plus 7% VAT, about 107 baht.
Although credit card interest rates are capped at 16% per year, lower than cash cards, withdrawing cash from an ATM or transferring to an account with a credit card often costs more than cash card withdrawals because of:
Even if you withdraw the full amount, these fees appear in the next bill. If unpaid, interest continues to accrue. Importantly, some credit card providers classify cash advances as personal loans, which carry higher interest.
For large purchases like electronics or furniture, promotions often allow 0% interest installment payments via credit cards. However, you must be cautious:
Personal loans (Ploan) come in various types with different interest rates based on borrower risk. Sometimes loans come from non-bank or non-credit card companies.
You must check if the interest rate is fixed (Flat Rate) or declining balance (Effective Rate). With the latter, you can make additional payments to reduce principal faster.
The Bank of Thailand explains refinancing as closing debt with an old creditor and moving to a new creditor offering better terms, like lower interest rates.
Sometimes refinancing within the same bank by switching loan types is possible—for example, from a credit card interest rate of 16% to a personal loan at 10% per year with a two-year term, which can be a good option.
10. Debt Consolidation Can Reduce Interest
You can combine credit card debt with your mortgage! Under the Bank of Thailand’s long-term debt relief measures, borrowers with good payment history can more easily consolidate debt, for example,
Ek, has a home loan and 50,000 baht credit card debt with the same bank, and the current home value covers all debt.
Ek can request debt consolidation to pay interest at the mortgage rate (usually 3-5% per year), lower than the 16% credit card rate set by the BOT. Cross-bank consolidation is also possible depending on each bank’s conditions.
Finally, credit cards and personal loans are tools that can increase liquidity but come with high interest costs. Before using such loans, plan carefully to ensure you can repay and avoid getting trapped in a cycle of "high-interest debt" long-term.
References: Bank of Thailand, Stock Exchange of Thailand, KTC, Krungsri Consumer, MAKE by KBank.
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