#1 Annual Maintenance Charges
Various banks offer ‘free credit cards’. Normally, this means that the banks will waive off the joining fees and annual maintenance charges for the first year. Post this period, they will start levying an annual charge on the card, which may vary from bank to bank. However, some banks also offer lifetime free credit cards. Hence, before opting to get a credit card, you must clarify if the card is free just for the first year or for its lifetime.
#2 Cash Advance Fee
The credit card provider gives a part of your total credit limit as a cash limit. You can use this amount to withdraw cash from the ATM using your credit card. While using this facility may be easy, it does not come cheap. Using your credit cards to withdraw cash entails an interest payment. This interest is levied from the day you make the withdrawal, and it can be as high as 2.5% of the amount withdrawn. The interest-free period of the card does not apply to credit card cash withdrawals.
#3 Late Payment Fee
If you are unable to pay the complete due amount, credit card providers give you the option to pay the minimum amount due within the due date. However, if you fail to pay at least the minimum amount due on time, the lender will levy a late payment fee along with the interest on the outstanding amount.
Also Read: Credit Card Payment: What Happens If You Fail To Pay Your Credit Card Bill On Time?
#4 Over Limit Fee
Some credit card providers allow you to spend over the credit limit assigned to you. However, this comes at a cost. Credit card providers charge a heft over limit fee when you exceed your credit limit. The minimum over limit fee is ₹500, and this fee may exceed based on the lender and the amount overspent.
#5 Foreign Currency Markup Fee
Though credit card providers allow you to use your cards globally, they never openly reveal that they levy additional charges on such transactions. Lenders levy a charge called a foreign currency markup fee on credit card transactions done outside the country. This fee may be different for different cards and is generally charged as a percentage of the foreign transaction amount.
While purchasing certain amenities like railway tickets or petrol, you may be charged a percentage of the transaction amount as an additional surcharge if you pay using your credit card.
#7 Goods And Services Tax (GST)
You must note that all transactions made using a credit card are taxed as per the prevailing GST rates. The GST is also levied on interest payments, annual maintenance fees and EMI processing fees. The current GST rate on credit card transactions is 18%.