Credit Card Hidden Charges: These charges are collected from you in lieu of credit card, you need to know about them
Credit cards are becoming increasingly popular among the urban population. These days, many people prefer to use it due to the credit card facility. Credit cards are a better medium to meet immediate money needs during emergencies. However, there are some fees associated with these cards which are very high. Therefore, people using credit cards should be aware of these fees.
1. Finance Fees:
Credit card issuers charge a finance fee which is basically the credit card interest rate. These fees vary from lender to lender. Every credit card has a preset finance charge and is the same for all customers. Also, interest is charged on the credit card only if you have not paid the outstanding balance in full.
2. Annual Maintenance Fee:
Most of us would have received a call for a credit card from banks or credit card companies. The caller says that you are being given a credit card for free. What this actually means is that the bank is waiving the joining fee and the annual fee for the first year. The annual fee is charged once a year and the amount varies from card to card.
3. Cash Advance / Withdrawal Charge:
Credit card allows a user to withdraw cash from an ATM machine, but the interest on it is high. Withdrawal of cash from a credit card attracts interest from the time the transaction amount is 2.5 percent. Finance charges on credit cards can be up to 49.36% per year depending on your card. This means that you will have to spend when withdrawing cash from your credit card, and it may be too heavy on your pocket.
4. Late payment fees:
Banks charge a flat fee when the credit card holder is unable to pay the minimum amount due in time. And there are also penalties for late payment. The minimum amount payable is calculated as 5 percent of your outstanding balance. However, it can be higher if you have purchased something on EMI through a credit card, or have spent more than the credit limit, etc.