A credit card comes in handy to facilitate various transactions anytime and anywhere. These include instant bill payments, ticket bookings, shopping and more! Hence, certain charges are levied to let you enjoy these benefits.
However, the best cards exclude several charges! They may not charge on cash payment at their branches, duplicate statement request and charge-slip request. You may also enjoy zero fees on cheque/cash pickup and outstation cheque processing.
Here is everything about a credit card’s interest rate and charges that you must learn before applying for the card.
- Rate of interest
Interest is charged when you can’t pay the amount spent using your credit card in full, from the last billing cycle.
However, the best low-interest credit card helps minimise the finance charges. So, consider applying for a credit card with the lowest interest rate that can help you clear your dues faster!
- Annual fees
This is a maintenance fee charged to let you use your credit card.
But a lifetime free credit card never charges this fee. It may also let you join and enjoy membership renewals for free. These benefits also come in a millennia credit card.
- Over-the-limit charges
This charge is levied when you use your credit card to perform transactions beyond the given credit limit.
However, certain credit cards don’t impose these charges. So, you can get enough time to learn to optimise your credit utilisation while not being charged. This is especially useful for first-time card users.
- Cash advance fees
This fee is charged when you withdraw cash using your credit card.
But a good credit card doesn’t charge this fee and offers interest-free cash withdrawals over a period. This is particularly helpful for an emergency transaction with your card at an ATM when you’re not carrying enough cash.
- Redemption fees on using rewards
Some credit cards charge this fee when you redeem a reward point.
But certain cards like a millennia credit card exclude this fee. Instead, you may be offered up to 10X reward points!
- Late payment charges
This charge is levied when you cannot pay the full credit card balance by the payment due date.
But charges are minimal if you use a credit card with the lowest interest rate.
- Foreign currency mark up fees
This fee is charged when you spend or withdraw cash in foreign currency and not Indian rupees. The fee is a percentage of your transaction amount.
But luckily the charge is low on some premium credit cards!
- Goods and Service Tax (GST)
It’s an indirect tax levied on the supply of services and goods in India.
Charges are determined according to the rates notified by the Government of India.
- EMI fees
When you take a loan against your credit card, a fee is charged to let you repay the amount in EMI.
Some cards charge a very small percentage of the transaction amount as EMI fees.
Read the terms and conditions of your credit card document to know about all the applicable charges and facilities. Awareness can ensure optimal use of your card!