HDFC Bank 
SBI Card 
IDFC Bank 
Bank of Baroda 
Axis Bank 
AU Bank
RBL 
Kotak Mahindra 
ICICI Bank 
CITI Bank 
HSBC 
YES Bank 
AMEX 
IndusInd Bank 
Standard Chartered
Federal Bank
Owning a credit card is like owning the greatest asset these days. It gives you the freedom to purchase anything now and pay for it later. Now-a-days, any individual can apply for a credit card. The processing of credit card applications has become super quick and easy. Various banks and financial institutions offer different types of credit cards with unique features on the basis of your spends. By appropriately analyzing your spending behavior, you can clearly choose one from the plenty of options available in the market.
But did you know about the fact that each of these credit cards comes with different types of charges? They do prove to be very beneficial in case of emergencies but on the other hand, they charge a hefty amount from the card owner for providing such services. If the credit card bills are not paid in time, these charges can prove to be very threatening for you.
Credit Card Charges List
If you are a new user or you already own a credit card, you should have an ample amount of knowledge about the different types of credit card charges and what are the ways in which we can avoid them.
Joining Fee
A joining fee is a type of credit card fee that is charged when your credit card application is approved or accepted by the bank. Generally, this fee varies from card to card and from bank to bank. Sometimes the cards do not have a joining fee but do charge some annual fees. However, sometimes in an offer period, banks do offer credit cards on which no joining fees would be charged. Hence, the applicants must check this fee before applying for a credit card.
Interest Charges
Also known as finance charges, is the cost of carrying debt. The credit card issuers charge this fee to the customers when they are unable to pay their debt in full. The unpaid bill amount attracts hefty interest rates that go up to 49% per annum. The interest charges will be applicable on the new transactions as well as the outstanding dues.
How To Avoid Interest
The cardholders who are unable to pay their debts on time and get the bill amount converted into EMIs. This can be a great option as the interest charged on EMIs would be lower as compared to the finance charges.
Learn more: Is It A Good Idea To Convert Your Credit Card Dues Into EMIs?
Late Payment Charges
Late payment charges will be applicable to your card if you do not pay the bills on the due date. Bank gives you an option to pay a minimum amount out of your total bill so that you do not attract late payment charges. But if you are unable to pay even the minimum amount, you are going to be charged with the late payment charges. A flat amount is charged on your statement balance. As ICICI Bank has recently revised the amount chargeable, let us have a look at how ICICI Bank Credit Card charges late payment fees from its customers –
| Statement Balance | Late Payment Fee |
| Less than Rs. 100 | NIL |
| Between Rs. 100 – Rs. 500 | Rs. 100 |
| Between Rs. 501 – Rs. 5,000 | Rs. 500 |
| Between Rs. 501 – Rs. 10,000 | Rs. 750 |
| Between Rs. 10,001 – Rs. 25,000 | Rs. 900 |
| Between Rs. 25,001 – Rs. 50,000 | Rs. 1,000 |
| More than Rs. 50,000 | Rs. 1,200 |
How To Avoid Late Payment Charges:
The cardholder should make sure that if he is unable to pay the full amount or any other amount by the due date, he should try to at least pay the minimum amount by the due date so that you do not attract the late payment charges.
Also Read: Comparison Between Late Fee Charged By Different Card Issuers
Payment dishonor fee
It is a type of fee that is charged when payment towards the credit card bill gets dishonored. The payment can be dishonored because of several reasons such as cheque bouncing, auto payment declined due to insufficient funds in the account. Banks charge a certain percentage or a minimum amount in case of dishonor. For example – HDFC Bank charges either 2% of the amount due or a minimum of Rs. 450 in case of payment dishonor, ICICI Bank charges either 2% of the amount due or a minimum of Rs. 500 in case of payment dishonor.
How To Avoid Payment Dishonor Fee:
You should always make sure that you have sufficient funds in your account every time you are about to pay your credit card bills. Also, while paying through cheque, be vigilant about the details you are filling in the cheque eg – date, the amount in words and amount in figures, etc.
Cash Payment Fee
A cash transaction fee, also known as cash payment, is charged when you pay for your credit card bills in cash. The banks generally charge a fee of Rs. 100 or lower per cash transaction towards payment of credit card bill.
How to avoid Cash Payment:
Cash payment charges can be avoided by paying your credit card bills through net banking. Net banking is the most convenient way to pay your bills. You do not have to visit the branch and stand in long queues. Rather you can just sit at home and pay your bills and avoid being charged for bill payments in cash.
Cash Advance Fees
Credit cards come with a feature that you can even withdraw cash from your credit card but this feature comes with a very high cost. You not only have to pay the cash transaction fee but you also have to pay interest on such cash withdrawal from the very first day till the date of payment. No interest-free period is granted in case of cash advance transaction done through a credit card. Banks charge a certain percentage or a minimum amount on such transactions. For example – HDFC Bank charges a higher of Rs. 500 or 2.5% of the amount withdrawn as a cash advance fee.
How to avoid cash advance charges:
The best way in which this fee can be avoided is by not withdrawing cash through your credit card. Always use a debit card to withdraw cash from your account or if you are running out of cash, just get an instant loan against your credit card.
Over-limit Charges
You are charged with over limit fee when your billing amount exceeds the total credit limit of the card. For example – the credit limit of your credit card is Rs. 70,000 but your outstanding bill has reached Rs. 90,000. In such a case, you are liable to pay the over-limit charges. Banks generally charge a percentage of a minimum amount as an over-limit fee. For example – HDFC Bank charges an over-limit fee of 2.5% which is subject to a minimum of Rs. 550.
How to avoid them:
In the case where you are regularly exceeding your credit limit, then you should either apply for a second credit card or you should place a request with the issuer bank for credit limit enhancement.
Goods and Service Tax (GST)
It is the tax amount that you have to pay on each of the charges mentioned above. It is applicable to all credit card transactions. In addition to the fees, you have you additional amount in the form of tax on every transaction which in turn creates a big hole in your pocket. In India, the Goods and Service Tax rate for banking and financial services is placed at 18%. In this way, if you have to pay a fee of Rs. 3,000, then GST @ 18% on Rs. 3,000 = Rs. 540. Total fees to be paid (including GST) = Rs. 3540 (3,000 + 540)
How to avoid them:
The only way in which you can avoid paying Goods and Service Tax is by paying all the bills on time and avoiding all types of fees mentioned above. If you pay all your bills in time and use your credit card wisely, you will not be burdened with any type of fees and hence no taxes.
Bottom Line
In this article, we have discussed some general fees and charges that are applicable to the credit cards of all banks. If you are a new user or even if you are an existing user, it is quite important for everyone to have knowledge about these charges. A few of them can be very easily avoided by paying bills on time and keeping yourself within the credit limit. Like we can always upgrade our credit card or apply for another credit card if we are falling short of the limit and avoid paying over-limit charges. Every applicant must thoroughly go through the respective card issuer bank’s MITC and then apply for a credit card.
