Common Credit Card Charges and How to Avoid Them

Credit cards can be very useful, but they also come with several charges that can add up if you’re not careful. Understanding these charges and learning how to avoid them can save you a lot of money. Here’s a simple guide to help you navigate through the common credit card charges and tips to avoid them. This would help you make the most of your credit card without incurring unnecessary costs.

1. Annual Fees

What Are They?

An annual fee is a charge that credit card companies levy once a year for the privilege of using their card.

How to Avoid Them?

• Choose No-Fee Cards: Look for credit cards that don’t charge an annual fee.
• Negotiate: Sometimes, you can call your credit card issuer and ask them to waive the fee, especially if you are a long-time customer with a good payment history.

2. Late Payment Fees

What Are They?

If you miss your credit card payment due date, you’ll be charged a late payment fee.

How to Avoid Them?

• Set Reminders: Use your phone or calendar to remind you of payment due dates.
• Auto-Pay: Set up automatic payments from your bank account to ensure you never miss a payment.

3. Over-Limit Fees

What Are They?

An over-limit fee is charged if you spend more than your credit limit.

How to Avoid Them?

• Track Your Spending: Regularly check your balance to stay within your credit limit.
• Opt-Out: Contact your credit card issuer and ask them to decline transactions that would push you over your limit.

4. Cash Advance Fees

What Are They?

Withdrawing cash using your credit card is known as a cash advance, which comes with high fees and interest rates.

How to Avoid Them?

• Use Debit Cards: For cash needs, use a debit card instead of a credit card.
• Emergency Fund: Keep some cash or an emergency fund to avoid needing a cash advance.

Also Read: How to Protect Your Credit Card Information Online

5. Foreign Transaction Fees

What Are They?

These fees are charged when you use your credit card for purchases in a foreign country or a foreign currency.

How to Avoid Them?

• Travel-Friendly Cards: Use credit cards that don’t charge foreign transaction fees.
• Local Currency: When possible, pay in the local currency instead of your home currency.

6. Balance Transfer Fees

What Are They?

Transferring a balance from one credit card to another usually incurs a balance transfer fee.

How to Avoid Them?

• Promotional Offers: Look for credit cards that offer 0% balance transfer fees during promotional periods.
• Read Terms: Carefully read the terms and conditions of any balance transfer offer.

7. Interest Charges

What Are They?

Interest charges apply if you don’t pay your full balance by the due date.

How to Avoid Them?

• Pay in Full: Always try to pay your balance in full each month to avoid interest charges.
• Low-Interest Cards: If you tend to carry a balance, look for credit cards with low interest rates.

Also Read: How to avoid interest charges on a credit card?

FAQs

1. What is an annual fee on a credit card?

An annual fee is a yearly charge by the credit card issuer for using their card. You can avoid it by choosing a no-annual-fee card or asking for a waiver.

2. How can I avoid late payment fees?

Set reminders for payment due dates or set up automatic payments from your bank account to ensure timely payments.

3. What is a cash advance fee and how can I avoid it?

A cash advance fee is charged when you withdraw cash using your credit card. Avoid it by using a debit card or keeping an emergency cash fund.

4. How do foreign transaction fees work?

Foreign transaction fees are charged for purchases made in a foreign country or currency. You can avoid them by using cards with no foreign transaction fees and paying in the local currency.

Conclusion

As we discussed some common credit card charges, let’s understand the annual charges for the Airtel Axis Bank Credit Card. If you’re planning to avail this credit card, it must be duly noted that the joining fees are only ₹500 and you can enjoy annual savings of up to ₹16,000, with amazing cashback and discounts.

To apply for this credit card, simply download the Airtel Thanks app and follow some simple steps.