The issue of "credit card interest rates" in Thailand is often seen as excessively high or calculated in a complicated way that can be confusing. It is essential for all loan users to clearly understand this to prevent becoming overwhelmed by unmanageable debt.
Certainly, the various cards that grant us "credit limits to use in advance" include not only credit cards but also cash cards and personal loans. If we use them, we must always understand their conditions thoroughly; otherwise, debts can spiral out of control.
To provide a clear picture, here is an example from the Bank of Thailand (BOT). If we have a credit card allowing cash advances (personal loan) and withdraw 15,000 baht at an interest rate of 25% per year, then paying only the monthly minimum of 3%, about 450 baht, every month, it would take 18 years and 3 months to fully repay this debt.
The principal is 15,000 baht, but the interest amounts to 29,000 baht.
You see, a small debt can become a large one if we don’t understand the "loan" we are using. Thairath Money has gathered 10 key points you must know about credit cards, cash cards, and personal loans right here.
For credit cards, there is "no interest" if you pay the full amount of your spending. Most cards offer a grace period of about 45-55 days, depending on each bank’s terms. For cash cards and personal loans, if the financial institution offers a zero-percent interest promotion, it usually specifies how many months it applies. If you don’t repay on time, interest will be charged.
The Bank of Thailand sets the maximum interest rates for regulated loans, mainly divided as follows:
Although the interest rate caps are set, when using credit cards, cash cards, or personal loans, if you miss payments or pay only the minimum, interest is calculated on a daily basis.
Many people shop freely but then struggle to pay the credit card bill at month-end, opting to pay only the minimum. However, they often overlook how much interest they are charged, which is calculated daily. For example,
Arm has a credit card with a billing cycle ending on the 17th of each month and a payment due date on the 2nd of the following month.
- On 18 May 2026, Arm purchased glasses costing 10,000 baht.
- The statement closes on 17 June 2026.
- The payment due date is 2 July 2026, and Arm chooses to pay the minimum of 10%, or 1,000 baht.
Though Arm’s principal balance remains 9,000 baht, by the next cycle on 2 August 2026, Arm must pay an additional interest charge of 260.38 baht accrued since the purchase date, composed of two parts:
1) Interest on the principal 10,000 baht totaling 197.26 baht,
calculated as 10,000 (principal) x 16% (interest) x 45 days (18 May - 1 July) divided by 365 days.
2) Interest on the outstanding interest balance, amounting to 63.12 baht,
calculated as 9,000 (remaining debt) x 16% (interest) x 16 days (2-17 July) divided by 365 days.
This is similar to point 3: if we pay "later than the due date," additional interest applies, often more than expected. For example,
- On 2 March 2026, Som-O purchased a new mobile phone for 80,000 baht.
- The payment was due on 15 April 2026, but Som-O forgot and paid on 30 April 2026.
Therefore, the credit card company calculates 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). Before this, the card issuer had sent debt collection calls. Som-O also has to pay a debt collection fee plus 7% VAT, approximately 107 baht more.
Although credit card interest is capped at 16% per year, which is lower than cash cards, withdrawing cash from an ATM (or transferring to a bank account) using a credit card usually costs more than cash cards because of:
You receive the full amount immediately, but these fees appear on the next statement. If unpaid, interest continues to accumulate. Importantly, some credit card providers treat cash advances as personal loans, with even higher interest rates.
For appliances, furniture, or big-ticket items, promotions often offer zero-percent installment payments with credit cards. However, caution is needed regarding:
Personal loans (Ploan) come in various types with differing interest rates depending on borrower risk. Sometimes, loans are not from banks or credit card companies.
You must carefully check whether the interest rate is fixed (Flat Rate) or reducing balance (Effective Rate). With the latter, you can make extra repayments to reduce principal faster.
The Bank of Thailand explains that refinancing means closing a loan with one creditor and moving to another with better terms, such as a lower interest rate.
In some cases, refinancing with the same bank but changing the loan type is possible. For example, switching from a credit card at 16% interest to a personal loan at 10% per year over two years may be a good option.
You can consolidate credit card debt with mortgage debt! Under the BOT’s long-term debt relief measures, borrowers with good payment history can more easily consolidate debts (Debt Consolidation), for example,
Ek has a mortgage and 50,000 baht credit card debt with the same bank, and the current house value covers all debts.
Ek can request to consolidate debts to pay interest at the mortgage rate (usually around 3-5% per year), which is cheaper than the credit card rate of 16%. Consolidation across banks is also possible depending on each bank’s conditions.
Finally, credit cards and personal loans can increase liquidity but come with high interest costs. Before using these loans, you must carefully plan repayment to avoid falling into a cycle of "high-interest debt" long-term.
Information referenced from the Bank of Thailand, Stock Exchange of Thailand, KTC, Krungsri Consumer, and MAKE by KBank.
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