However, there are some charges associated with these credit cards which are quite high. Usually the bankers do not tell this. People using credit cards should be aware of these charges.

Cash Advance Fee

Withdrawal of cash from a credit card is called cash advance. Many times, in haste, instead of debit card, there is a mistake of withdrawing cash from credit card as well. Credit card companies allow users to withdraw cash from ATM machines, but interest is high. There is no benefit of interest free credit period on cash advance i.e. the interest free grace period you get after shopping is not available in it. In this way, withdrawing cash from credit card can be heavy on your pocket.

Late Payment Fee

Late payment fee is generally levied on your outstanding balance when the minimum is not paid by the due date. Banks and credit card companies usually charge late payment fees based on the outstanding amount. Higher the bill amount higher will be the late fee.

Annual Maintenance Fee

Annual Maintenance Fee is the charge that you pay to the credit card companies to maintain your account. This fee is taken once a year. This fee varies on different cards. Many card companies do not charge any annual maintenance fee on credit cards.

Cash Processing Fee

Normally a cash processing fee is charged when you make your credit card payment in cash. Banks also allow you to make payments through other modes like net banking, check payment and mobile banking without any extra charges.

Reward Redemption Fee

The purpose of awarding reward points on a credit card is to encourage the customer to use the credit card. The bank gives different facilities to redeem the credit card’s reward points. Once you have accumulated reward points, you can redeem the same as per the convenience offered by the bank. But many charge for redeeming back rewards.

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But as per the new rules, you can save yourself from paying penalty charges even if you don’t make the payment on the due date. Reserve Bank of India (RBI) has provided the option of payment to the customers without any charge after the due date is out.

RBI has told banks and credit card issuers that they can take penalty only after three days of due date. It means to say that if you have missed the credit card payment due date, then you can make the payment within 3 days of the due date.

Three days chance

According to the master direction for credit cards and debit cards issued on 21 April 2022, the RBI has said that the credit information companies (CICs) that issue the cards will show the credit card account as past due. Penalty charges, late fee or other charges on delay will be applicable only then. When the credit card account remains outstanding for more than three days. That is, if you make the credit card payment within three days after the due date, then you can avoid the penalty.

Credit score will not be affected

In such a situation, if you have missed the credit card payment due date, then you can make the payment within three days of the due date. In this, you can also avoid the penalty imposed on late payment. If you pay within three days, your credit score will not be affected.

Have to pay late fees

Banks and credit card companies usually levy pre-determined late payment charges based on the outstanding balance. This results in late fees increasing in proportion to the size of the outstanding balance. The higher the amount of the bill. The more late fees are charged.

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