With their increased usage post demonetisation, credit cards have become a necessity for modern-day lifestyle needs. Cardholders can buy goods in full payment or EMIs and repay the borrowed amount by the end of every month. If total repayment isn’t feasible, they can also convert the outstanding amount into manageable EMIs.
While these were the benefits, cardholders must also be aware of certain credit card charges levied on various events.
Types of credit card charges
Different credit cards come with different charges as per their issuers’ terms and conditions, some of which you can avoid.
Below are a few common Credit Card charges
1. Rate of interest
Many people have the common notion that credit cards incur high interest rates, which can lead to debts.
While, the fact is, every card offers a grace period of up to 50 days post statement generation along with a due date. No interest is levied on the outstanding amount if you make the bill payment before the due date. Issuers charge high rates of interest only when you default.
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Again, if you avail an emergency personal loan on your credit card, you need to pay interest on the borrowed principal. Bajaj Finserv charges nominal rates and charges on its Bajaj Finserv RBL Bank SuperCard to ensure affordability and convenience.
2. Overdue penalty charges
If you default on the bill payment, overdue penalty charges or late payment fees are imposed over and above the interest rates. You can easily avoid these credit card charges by paying your monthly bill before the due date.
3. Annual fee
Issuers charge an annual fee for the privilege of using the payment card. The amount depends on various factors like features, benefits, card limit, etc. While many cards don’t charge this amount, those with annual fees offer maximum features and benefits.
4. International transaction charges
Credit card international transaction charges are imposed when you make payments or transactions in a foreign country. It usually ranges within 2% to 5% of the amount purchased. Opt for a credit card with zero or nominal foreign transaction charges.
5. ATM withdrawal fee
Credit cards allow users to withdraw cash from ATMs against a transaction fee, also known as cash advance charges. Moreover, the interest rate is charged on the withdrawn amount on a per-day basis. It’s usually recommended to avoid making ATM withdrawals using credit cards.
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However, the Bajaj Finserv Credit Card allows ATM withdrawal and levies a 0% rate of interest on its repayment for up to 50 days.
Besides these, cardholders may need to pay duplicate statement fee, outstation cheque fee, cash payment at branches, call-a-draft fee, card replacement fee, cheque return, etc.
Note that, as per RBI rules, merchants are not permitted to deduct credit card swipe charges from customers. They must bear these credit card swipe machine charges as rental fees for using this POS machine. Learn about all the fees and charges associated with your credit card and make its best utilisation accordingly.
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