Yes, Sripad is right. Actually, what you agreed for is 4% flat, means irrespective of the remaining outstanding balance in your account they will charge you 4%. What they may be charging you is 9.25% on the remaining balance. Initially you may get charged more, but when the outstanding balance comes down, the interest charged will be less. Effectively you will be paying equivalent to 4% flat. But double check the caculation to make sure you are not paying more.