Credit cards have a lot of benefits and provide a good advantage when you are falling short of funds, especially during times of emergency. You can use your credit card to make purchases online as well as offline and get handsome rewards in the form of brownie points, cashbacks, etc. While all this may sound super exciting, one can’t ignore the fact that these credit cards come with a lot of extra fees & charges.
Some of them you would generally be aware of while some others could come in the form of hidden charges. These hidden charges are the ones that affect you in the long run. Hence, it is important to always be aware of the hidden charges before you sign the agreement for your credit card, whether it is an Airtel Axis Bank Card that comes with numerous benefits or any other bank credit card.
Here, we are going to learn about the hidden fees that credit card companies charge us.
What are Hidden Charges?
Hidden charges are, as the name suggests, the hidden fees that credit card companies often charge you. As these fees are not mentioned explicitly and are not as transparent as they should be in comparison to other charges levied on the usage of credit cards, they are called hidden charges.
Where to Find Hidden Charges?
There are two ways to find the hidden charges on your credit card. You can either check the agreement of your credit card or go to the official website of the issuer to learn in detail about all the charges. In case, you are not comfortable with these charges, you can also demand to close or cancel credit card.
Types of Hidden Charges on Credit Cards
Now, let’s learn about the top hidden charges that you must be aware of before using your credit card:
Annual Fee
As clear from the name itself, it is the fee that is charged annually from you for the maintenance of your credit card. Hence, it is also called the maintenance fee. However, not every bank or credit card issues this fee on you.
Late Payment Fee
If you have an outstanding amount for a due date and you are unable to pay it back on time, then the bank or credit card issuer would charge a late payment fee from you. These charges vary from bank to bank and sometimes are quite hefty.
Cash Advance Fee
Another hidden fee that is usually not mentioned explicitly at the time of the issuance of your credit card is the cash advance fee. This is the fee that you pay if you withdraw cash from an ATM using your credit card. As these charges are too heavy and range from 2.5% to 5%, it is never recommended to withdraw cash advances.
Interest Charges
This is the interest that you pay monthly on your outstanding amount to your bank or credit card issuer when you are unable to pay your monthly amount in full.
Foreign Transaction Fee
Though it depends from bank to bank, there is often a foreign transaction fee of about 3% that you pay when you make transactions in foreign currency.
Over-the-limit charges
Another fee that you should be aware of are the over-the-limit charges. This is the fee that your bank or credit card issuer may charge you when you exceed your credit card limit.
So now that we have shed light on the various types of hidden charges for a credit card, choose your credit card wisely.
