Common Bank Charges:
Credit card usage in India has grown rapidly in recent years. Banks and fintech companies now issue credit cards easily, allowing more people to enjoy the benefits of cashless payments. However, many cardholders are not aware of the different charges that banks apply. Understanding these charges helps you use your card wisely and avoid unnecessary costs.
Most credit cards come with an annual maintenance or renewal fee. This fee depends on the type of card and the benefits it offers. Some premium cards charge higher fees, while basic cards may even be free for the first year.
If you do not pay your credit card bill on time, banks charge interest on the outstanding amount. The interest rate is usually around 3% per month, which can add up quickly. To avoid this, always pay your bill before the due date.
Withdrawing cash using a credit card is expensive. Banks charge a fee ranging from 24% to 46% annually on such transactions. It’s better to use a debit card for cash needs.
If you spend more than your credit card limit, banks will apply an overlimit fee. It’s important to keep your spending within the assigned limit to maintain a good credit score.
If you lose your card and request a new one, the bank will charge a replacement fee.
If a cheque payment made for your credit card bill bounces, banks impose a penalty.
Credit card usage in India has doubled since 2019, with over 111 million cards in use by May 2025. This rise is mainly due to the increase in digital payments. However, unused credit cards may be closed by banks if not used for over a year. Users can contact customer care or use online banking services to reactivate or close their cards.
Using a credit card smartly means knowing all these charges and paying your dues on time.
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