Hidden Credit Card Charges: Many people use credit cards today. They are popular for shopping, bill payments and online purchases. Credit cards offer benefits like discounts, reward points, cashback and special offers. But many users forget that a credit card is a type of loan. This loan must be repaid within a certain period. If you delay the payment, banks charge interest and penalties.

Hidden Credit Card Charges to Know:

Annual fee: Most credit cards come with an annual fee. The first year is often free but from the second year, banks charge between ₹1,000 and ₹5,000. This fee depends on the type of card.

Transaction fees: Banks apply a fee of 2% to 4% on different card transactions including international payments or wallet reloads.

Late payment fees: If the credit card bill is not paid on time, banks charge a late fee. This ranges from ₹500 to ₹1,000 depending on the card.

Minimum payment charges: Some users pay only the minimum amount due. But this leads to interest charges on the remaining balance. Interest can range from 2% to 4% monthly.

Cash advance charges:When cash is withdrawn from an ATM using a credit card then cash advance fee is charged. This interest rate will be from 2% to 5% of the withdrawn amount. Interest is also charged from the withdrawal date.

Types of credit cards:

Add on credit cards: These are issued to family members of the main cardholder. The credit limit is shared. If you don’t have a credit score, using an add on card can help you start your credit journey.

Beginner credit cards: These cards have low credit limits and are designed for first time users. They are a good option to build credit history gradually.

Using a credit card wisely is important. Always pay your full bill on time. Know all charges before using the card. Use credit for essential purchases only. Track your spending regularly. Choose the right credit card based on your income, needs and repayment ability.

Also Read: Top 5 Strategies to Improve Your Credit Score in No Time

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