Credit Cards: In today’s time, you will not be able to find such a person who does not have a credit card in his wallet. Nowadays even freshers get a credit card as soon as they join the job.
Once this magical card came in hand, the shopping started indiscriminately. But many times we do not understand the terms and conditions of the card companies and then we have to bear the brunt of it. Let’s know the complete details about it.
The first thing you must tie the knot is that never think that you get the credit card unconditionally. The first thing is that you should never think that there are no charges on credit cards.
There are various charges and conditions which are not disclosed to the customer during the initial interaction. Hence, there is a need to delve deeper into what exactly a credit card costs and what are its terms. This must be ensured before signing the card application form.
open and hidden costs
Annual Fee & Other Expenses Â
Credit card companies usually lure customers by waiving off the annual fee for the first year and offering the credit card free of cost. However, this offer expires after one year and after that most companies start charging an annual fee of Rs 1,000 to Rs 3,000 depending on the card type and credit limit.
Compound interest ratesÂ
If payment is not made by the last date of bill submission, interest is charged at the rate of 1.11 per cent to 4 per cent per month on the outstanding amount. Although, this interest rate does not seem high but when you look at it on an annual basis, it works out to 27 to 48%.
overdraft limit fees
This charge is levied if a customer spends more than his credit limit. Usually it is a certain percentage of the amount spent and its minimum and maximum limits are fixed.
Late payment fee
In addition to interest rates, companies also charge late payment fees when you are late with bill payments. Either its amount is fixed or it is a specific percentage of the outstanding amount. This fee varies for different credit cards.
Duplicate Statement Charges
Most credit card companies charge a flat fee for duplicate statements of credit card transactions.
Transactions in foreign currency
In case of in-country transactions, the foreign currency is first converted into Indian Rupees at a rate decided by the network infrastructure provider (Master/Visa) and a certain percentage of the transaction value is charged as fee. is taken on.
Cash withdrawal feeÂ
If cash is withdrawn from the bank through a credit card within the credit limit, a fee is charged from the customers which is a certain percentage of the withdrawn amount.
Charges on petrol and train ticket purchases
- A certain percentage of the transaction amount is charged as a fee for petrol and rail ticket purchases made through credit cards.
- How to avoid hidden card charges?
- One thing is certain that if you use a credit card, then some of the above charges cannot be avoided, but if you adopt the following measures, then it is possible that the burden of charges will be reduced to some extent.
- Before applying for a credit card, do a thorough research about which credit card is suitable for you.
- Apply only for cards that meet your needs.
- Understand credit card introductory rates. Also find out what are the charges associated with using the credit card. Read and understand the terms and conditions thoroughly. For this, you can take the help of the booklet sent along with the credit card.
- Shop wisely with your credit card. It would be better to avoid unnecessary expenses.
- If you have not been able to pay the credit card dues, then at least keep paying the actual amount of interest on time.
- Don’t just look at the bill amount in the credit card statement, also check if any unnecessary charges have been added.
- Try never to spend more than your credit limit.
- If you are using your credit card abroad, then understand the Exchange Rate very well.
