Using credit cards is easy, plus they allow you to earn rewards and increase your ability to shop. Still, while using a credit card can be useful, it is important to know all the fees so you don’t spend unnecessarily. If you’re wondering about a first credit card or considering signing up for a RuPay card, you should first learn about the charges you may face.
1. Annual Fees
It’s common for premium cards and often others to charge an annual fee. For instance, since travel and rewards cards tend to charge higher annual fees, they often come with much better bonuses. Another side of this is that some basic credit cards including the RuPay card, may waive off the first-year fee or allow you to use them for free forever.
When you apply for credit card services, check if the annual fee is waived in the first year or if you can get it refunded upon reaching a certain spending threshold.
2. Interest Rates
If you haven’t paid your entire credit card bill by the deadline, interest is charged. In India, annual rates may be anywhere between 24% and 48% or 2% to 4% monthly, except during 0% interest promotional periods. However, RuPay credit cards are subject to these charges.
Usually, interest is added daily and can quickly increase your debt. Pay off your complete bill whenever you can.
3. Late Payment Fees
Falling behind on your payment date causes a late fee, and the amount you pay depends on the balance left to be paid. This negatively impacts your credit score. When applying for a credit card, see what the issuer charges for penalties and if they provide either payment reminders or a grace period.
4. Cash Advance Fees
Withdrawing cash from a credit card can charge a fee of approximately 2.5% to 3.5% of the withdrawn amount.
If you use a RuPay card from an Indian bank, you might be able to get cash from ATMs, though fees usually still apply unless the bank says otherwise.
5. Foreign Transaction Fees
When you spend using a credit card in a currency other than INR, you may be charged a 3.5% foreign transaction fee. Even though RuPay credit cards can be used internationally, their acceptance is considerably lower than Visa’s or MasterCard’s.
6. Overlimit Fees
If the amount you charge is greater than your authorised credit limit, you may be charged an overlimit fee, which is about 2.5% of what you owe above your authorised credit limit. While some banks will let you make such a transfer, others will not.
You may ask for your spending limit to be increased if you regularly use your card up to its full limit and have made regular on-time payments.
7. Card Replacement and Other Miscellaneous Fees
Consumers may have to pay a charge when requesting to replace a lost card, get a new PIN, convert an EMI transaction, or ask for hard-copy bank statements. They rarely cost much on their own, but can all collectively add up.
How to Avoid These Fees
- Pay your full bill before the due date, avoid using your credit card for cash withdrawals and use auto-debit or payment alerts.
- Choose the right card by comparing annual fees, interest rates and perks before you apply for credit card
- Consider a RuPay credit card if you’re looking for a card that’s accepted within the country, has lower charges, and is better integrated with government payment platforms like UPI.
Conclusion
To manage your finances effectively, you should be aware of credit card fees. Whether you want a global brand or a RuPaycreditcard, always review all the details before you use it. If you know these expenses, you may use your card more carefully to prevent debt.
