Different Credit Card Charges & Fees Explained
Posted on Friday, September 6th, 2024 | By IndusInd Bank
Are you concerned about how much you are really paying in fees for your credit card? It is a fact that credit cards offer the convenience of cashless transactions, buy-now-pay-later options, and rewarding benefits. However, they also come with various fees that you must understand to manage your finances better.
Let’s break down the different credit card fees so you can make smarter financial decisions and get the most out of this useful tool.
Annual Fees
A credit card often comes with an annual fee, a charge that the bank imposes for the benefits, rewards, and privileges associated with the card. This fee varies widely depending on the type of card you hold. Usually, premium cards that offer extensive benefits have higher annual fees than cards offering standard features.
If you want to avoid joining and annual fees without compromising on features, you can consider the IndusInd Bank Platinum RuPay Credit Card. This lifetime free credit card comes with various additional benefits, like:
UPI (Unified Payments Interface) payments | Enjoy smart savings by linking your RuPay credit card to UPI. Just scan and pay at any merchant QR |
Reward points | Earn 2 reward points per ₹100 on UPI transactions and 1 reward point per ₹100 on non-UPI transactions |
Fuel surcharge waiver | Get a 1% waiver on fuel surcharges across petrol stations in India |
Comprehensive insurance | Includes travel insurance with coverage for lost baggage, passport loss, and even missed flights |
Enhanced security | With ‘Total Protect,’ you are protected against unauthorised transactions or counterfeit fraud (for an amount up to your card’s credit limit) |
Apply for a credit card online today and get started with IndusInd Bank! Save yourself from unnecessarycredit card charges and enjoy exclusive benefits.
Interest Charges
Your bank generates a credit card statement each month and sets a fixed due date for payment. You must pay the full credit card bill to avoid interest charges. Making only a partial payment on your outstanding balance subjects you to interest charges. The interest rate, known as the Annual Percentage Rate (APR), may vary based on your card and creditworthiness.
Late Payment Fees
Paying your credit card bill after the due date results in a late payment fee. These fees can be substantial and might also lead to an increase in your APR. Repeated late payments can negatively impact your credit score, so it’s crucial to pay at least the minimum amount due on time.
Over-limit Fees
Some credit cards allow you to exceed your credit limit, but this comes with an over-limit fee. This is charged for the convenience of being able to spend beyond your approved limit, and it can be a fixed amount or a percentage of the over-limit amount.
Cash Advance Fee
Withdrawing cash using your credit card at an ATM is considered a cash advance. This typically incurs a cash advance fee, often a percentage of the withdrawn amount. These fees often come with higher interest rates than regular purchases and no grace period, which means the accruing of interest starts immediately.
Foreign Transaction Fee
When you use your card for international transactions or online purchases in a foreign currency, a foreign transaction fee may apply. This fee is usually a percentage of the purchase amount and can add up quickly for frequent international travellers. If you travel abroad frequently, choosing the IndusInd Bank Legend Credit Card is beneficial, as it offers a 1.8% discounted foreign currency mark-up.
Goods and Services Tax (GST)
In India, credit card transactions attract Goods and Services Tax (GST) on various fees, such as interest rates, annual fees, late payment fees, and processing charges. The tax is levied at a rate specified by the Ministry of Finance.
Also Read: The Role of Credit Cards in Personal Finance
Key Takeaways
By now, you must have understood that there are several types of charges associated with credit cards. Some of them include annual fees, interest charges, late payment fees, foreign transaction fees, cash advance fees, and over-limit fees. Understand these charges to make the most out of your credit card.
Consider the IndusInd Bank Platinum RuPay Credit Card to avoid unnecessary charges like annual and joining fees and enjoy extensive features. You can apply online and get instant approval, as the entire process is 100% digital and paperless!
Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.