When shopping and making transactions, credit cards can be a massive aid, plus you receive future rewards. This also lets you improve your credit history, at the same time. However, everything does not come for free. Since it is a kind of have a loan of; credit cards do come with a different of terms and requirements. Most of the cardholders just check the annual fee when they apply for credit card, but there are various other credit card charges which should be taken into consideration.
Annual maintenance fees
Often popularly known as the ‘annual fee’ and is not necessarily a hidden charge. Usually, banks issue a free credit card, which means that for a limited time or a lifetime, there will be fees paid for using the credit card or annual fees on the card.
Cash advance fee
A specific part of your credit limit is in cash which you can withdraw from the ATM kiosk with the help of your credit card. Cash withdrawal is quite a pricey transaction as it entails fee or interest on the amount withdrawn. Additionally, what many cardholders are uninformed of that interest is charged right from the day of cash withdrawal; the interest-free period is not valid for cash withdrawals.
Over the limit fee
Depending on the type of credit caes, you may or may not be able to spend on your credit card for more than the credit limit. Banks do not permit this for free- they charge a hefty amount as over the limit fee for such transactions. Even if you’ve spent INR 10 over the cap, you’ll still have to pay a minimum amount.
Late payment fees
If you cannot pay the total amount outstanding on your credit card, banks will give you the alternative of paying a minimum amount. The bank will charge a late payment fee in case you are unable to pay even the minimum amount. Based on your statement balance, a fixed sum is levied.
The Annual Percentage Rate or APR levied on your credit card also influences your bills, especially when you have an outstanding amount. It is the reason why credit cards can lead to debts because the interest rates on credit cards are very high compared to other types of loans. But it is only applicable when you cannot pay the total outstanding amount.