10 Credit Card Hidden Charges that You should Know

Credit cards offer immense convenience and numerous benefits, from reward points to cashbacks and discounts. However, they also come with a range of hidden charges or hidden fees that can catch you off guard if you’re not aware. 

In this blog, we will take you through some of these charges and how you can avoid them. Moreover, if you want a credit card in New Delhi or any other city across India, with relaxed eligibility terms and extra benefits while paying no hidden charges, then get the Airtel Axis Bank Credit Card.

Apply for the best credit card from the Airtel Thanks app and get amazing rewards.

Let us take a look at the various credit card charges that are often hidden (sometimes, even in plain sight). 

Credit card annual fees

Many credit cards come with annual fees that are charged once a year. While some cards offer fee waivers based on spending thresholds, others may not. It’s essential to read the terms and conditions to understand the annual fee structure and any potential waivers. Even if a card advertises “no annual fee,” this might only apply for the first year, with fees kicking in subsequently, so you need to be careful.

Late payment fees on credit cards

Missing your credit card payment due date can result in hefty late payment fees. These fees can vary based on the outstanding amount but typically range between ₹100 and ₹1,000 or more. Besides the fee, late payments can negatively impact your credit score, making it harder to secure loans in the future.

Interest rates on revolving credit

If you don’t pay your full outstanding balance by the due date, the remaining balance is carried forward to the next billing cycle, attracting high interest rates. Credit card interest rates in India can range from 24% to 48% per annum, which can quickly accumulate if balances are not paid off in full.

Read more: APR on credit card – the complete guide

Cash advance fees on credit cards

Withdrawing cash using your credit card is highly discouraged due to the significant cash advance fees. Typically, this fee is around 2.5% to 3% of the withdrawn amount, with a minimum charge of ₹300 to ₹500. Additionally, cash advances attract interest from the day of the transaction until the amount is paid off, without any interest-free period.

Read more: How to withdraw cash from credit card?

Over limit fees on credit cards

Spending over your credit limit can result in over-limit fees. This fee is usually charged as a fixed amount, often around ₹500. Credit card issuers allow transactions over the limit for convenience but penalise cardholders with these charges. It’s advisable to keep track of your spending to avoid exceeding your credit limit.

Read more: 10 ways to increase your credit card limit quickly

Foreign transaction fees on credit cards

Using your credit card for international transactions or on foreign websites can incur foreign transaction fees. These fees are typically around 3.5% of the transaction amount. It’s essential to check if your card charges this fee and consider alternatives like cards with no foreign transaction fees for international spending.

Duplicate statement fees

If you require a duplicate statement for any reason, you might be charged a fee. This fee can range from ₹100 to ₹200 per statement. Most banks offer electronic statements free of charge, so opting for e-statements can help you avoid this fee on your credit card.

Credit card replacement fees

Losing your credit card can be stressful, and getting a replacement can come at a cost. Banks usually charge a card replacement fee, which can range from ₹100 to ₹300. 

Read more: How to block your credit card?

Balance transfer fee charges on credit cards

Transferring your balance from one credit card to another can help manage debt, but it often comes with a balance transfer fee. This fee is typically around 1% to 2% of the transferred amount, with a minimum charge of ₹250 to ₹500. While balance transfers can offer lower interest rates, they will still drive up the cost of owning a credit card for you.

Service tax & GST on credit cards

All credit card fees and charges are subject to Goods and Services Tax (GST). Currently, GST is charged at 18% on all applicable fees, including late payment charges, annual fees, and other service charges. This additional tax can also increase the overall cost of using your credit card.

A credit card can be very useful when you know how to make the most of it. While there are many hidden charges, you can still manage them quite easily once you have a clear idea of how they work and steer clear from them.