People love credit cards for cashback reward points and offers. If you use your credit card properly and pay your entire bill on time, you shouldn’t worry too much. But these credit cards come with many hidden charges that you should be aware of. Read what is the full news.
Credit Card Hidden Charges: Banks give you credit cards without any mortgage. Due to the cashback, reward points and offers available on the credit card, we take the credit card but later we get scared after seeing the hidden charges associated with it.
If you use your credit card properly and make full bill payment on time, then you should not worry too much. However, you must be aware of some hidden charges that are charged to you.
Annual Maintenance Charge
This is a charge that applies to every credit card whenever you apply for a new credit card. Although some banks waive the joining fee and maintenance charge for the first year, but from the next year onwards you have to pay the maintenance charge of your credit card every year.
Cash advance fee
Cash advance fee is the amount you withdraw from an ATM using your credit card. Generally, it is not advisable to withdraw cash from credit card through ATM because banks levy high charges on it. Typically, the cash advance fee is 2.5 percent of the cash advance amount.
Interest Rate (APR)
When your credit card bill is generated, total amount due and minimum amount due are written in it. Many people pay only the minimum amount, however, by doing so you can get trapped in the debt trap because the credit card company charges 2 to 4 percent interest every month on the remaining amount.
Late payment charge
If you do not pay even that minimum amount before the due date, then the credit card company also imposes late payment charges on you.
Foreign transaction fee
For any transactions you make in foreign currency, Foreign Transaction Fee applies. This fee is up to 3 percent of the value of your purchases made abroad.
GST
A GST of 18 percent is levied on any transaction made by credit card.
