Here are 6 Hidden Credit Card Charges You Didn’t Know About 2019?
This is 6 Credit Card Fees Charge that we never know while using Credit Card :
Credit cards are considered both as a boon and a curse in this age. Having a credit card can show to be financially helpful. However, if it is not used wisely, it can clog debt with additional charges that can affect your financial investments. Credit card activities such as repayment of loans form an important part of a credit score and help an individual build his CIBIL score. CIBIL Score helps in getting bank loan and big credit easily.
However, what most people expect is that credit cards do not come for free. There are hidden charges on your credit card that banks usually don’t mention. Experts suggest that these little-known charges need to be understood to avoid penalties, extra payment charges and hefty interest rates.
A few different charges that may apply to your credit card:
There are hidden charges on your credit card that banks usually don’t mention. Experts suggest that these little-known charges need to be understood to avoid penalties, extra payment charges and hefty interest rates.
1. Annual Maintenance Fee :
Credit cards come with a joining fee and an annual maintenance fee. However, if you are offered a credit card for free, the bank waives off the joining fee and annual fee for a certain period. Nowadays most of the banks waive the joining fee for the first year itself and apply it from the second year onwards. Some banks waive these charges even if you spend up to a pre-specified limit.
2. Interest Charges :
Banks generally charge an interest rate of 3-4 per cent per month on the amount due, and the annual interest rate usually ranges from 36 to 48 per cent, which is quite high. Credit cards offer an interest-free period of 45-50 days to pay off all expenses. If the payment is not made within that time, an interest rate is charged. After passing through the interest-free period, if the full payment is not made on time, banks levy interest charges to be borne by the cardholder.
3. ATM Withdrawal Charge :
Though cardholders have the option to withdraw money from ATMs using a credit card, such transactions come with additional charges. About 2.5 per cent of cash withdrawn from ATMs is withdrawn as fees. Immediate interest on cash is also compounded from the date of withdrawal and ranges from 36 to 48 per cent per annum. Therefore, experts suggest that cash should be withdrawn from ATMs using credit cards only in case of emergency.
4. Late Payment Fee :
If a person does not pay the minimum due amount on time, the bank charges an additional late payment fee. Post the due date after the payment is made, these charges are applicable. These charges, however, are not included in interest charged. Along with late payment charges, the credit score of the card holder also gets affected, so always try to avoid it.
5. Goods and Services Tax India :
As per the prevailing GST rates, all credit card transactions are topic to GST. Service tax was levied at 15 per cent on credit card related services before the implementation of GST. Now, after GST, there has been an increase of 3 per cent and now it is at 18 per cent.
6. O/D overdraft fee :
When the credit card holder exceeds their monthly credit limit, overdraft charges applicable to the credit card apply.
Source : india.gov.in Finance Taxes