Credit cards

The CBSL ceiling

The Central Bank of Sri Lanka sets a maximum interest rate for credit cards of 28% a year. Pawning facilities are capped at 18% and pre-arranged temporary overdrafts at 23%.

Penal interest may not exceed the regular rate by more than two percentage points.

What this means in practice: a licensed bank cannot charge more than 28% a year on a credit card.

The ceiling does not apply to online lenders. They are not CBSL-licensed — a moneylender that does not accept deposits is not required to be — so the cap does not bind them. That is why an online loan can charge up to 190%, more than six times a card.

How a credit card works

If you pay the full statement balance by the due date, purchases carry no interest. This is the interest-free period — usually a minimum of 21 and a maximum of 51 days.

If you pay only the minimum (typically 4% of the balance), interest of up to 28% applies to the remainder. A balance carried for months gets expensive quickly.

Typical fees

Annual fee

Roughly Rs. 1,000 – 10,000 by card tier

Joining fee

Roughly Rs. 1,250 – 2,750 (waived on some premium cards)

Supplementary card

Roughly Rs. 1,000 – 3,500

Interest-free days

Minimum 21 – maximum 51

Minimum payment

Around 4% of the balance

Late payment fee

Rs. 900 – 2,000, or a percentage of the minimum payment

Over-limit fee

Up to Rs. 1,950 (free on some cards)

Cash advance limit

40% – 75% of the credit limit

Cash advance fee

Rs. 300 – 700, or 4% – 4.5%, whichever is higher

The ranges above are drawn from the published tariff schedules of several major banks. Exact figures vary by bank and card tier — check the bank's own tariff page before applying.

The cost of borrowing — compared

What the same amount costs per year, by type of credit:

Bank personal loan

Roughly 12% – 16% a year

Temporary overdraft

Up to 23% a year (CBSL ceiling)

Credit card

Up to 28% a year (CBSL ceiling)

Online short-term loan

Up to 190% a year

This is the most useful comparison on the site. The same money can cost more than ten times as much depending on which product you use. Before taking an online loan for an emergency, check whether a credit card or bank facility you already hold would do the job.

What you need to apply

• Stable monthly income — the minimum varies by bank
• National Identity Card
• Salary certificate and 3–6 months of payslips
• Bank statements
• A clean CRIB report

Using one sensibly

1. Pay the full balance every month. Do that and purchases cost nothing in interest.
2. Don't pay only the minimum. A carried balance compounds quickly.
3. Avoid ATM cash advances. Interest starts immediately and a fee applies.
4. Diary the due date. That avoids both the late fee and a mark on your CRIB record.

Frequently asked questions

What is the credit card interest rate?

The Central Bank of Sri Lanka caps it at 28% a year. The actual rate may be lower depending on the bank and card tier.

How long is the interest-free period?

Usually a minimum of 21 and a maximum of 51 days. It applies only if you settle the full statement balance.

Should I take cash out on a card?

Generally no. Cash advances get no interest-free period — interest starts the same day — and carry a fee of roughly Rs. 300–700 or 4%–4.5%.

Is a credit card better than an online loan?

On cost, yes — a card is capped at 28% while online short-term loans reach 190%. But a card requires stable income and a clean CRIB record.

What if I only pay the minimum?

Interest accrues on the remaining balance and compounds each month. Carried over time, the total cost rises sharply.