A Credit card is a Plastic or metal card that allows you to make any online and offline payment. For every credit card certain limit will be provided, that is called as credit limit. In other words Credit card is a card that provides interest free loan up to 50 days. This time period is varies from one bank to other bank. Every credit cards comes with different features, benefits and charges. Now let us know about what are the types of credit card charges.
Credit cards will have charges like Issuance fee, Annual charges, Renewal charges, late charges, interest, processing fee, cash advance fee, overlimit fee, markup fee, Redemption fee, GST etc.
Now let us discuss about these charges in detail
what is issuance fee on credit card?
Issuance fee is the charges levied on the customer to provide the card. This charges will not applicable on all cards, But only in limited cards like premium and super premium credit cards may have these kind of issuance fee.
what is Annual Charges of credit card?
Annual charges on the credit card nothing but yearly charges levied on the card holder to use the card. This annual fee generally debited 3 months after receiving the credit card. In some credit cards after charging annual fee to the client reward points or voucher will be given which is equivalent to charges.
What is renewal fee on credit card?
yearly charges of credit card which are deducting after 1st year is called as renewal fee. Means every credit card will be renewed yearly once. In certain credit cards banks will give option of LTF ( Life time free) means there will not be any annual or renewal fee applicable on that particular cards. Some banks will give option of threshold spend limit to avoid renewal charges. Means if client can use that threshold amount to avoid renewal charges. Even though credit card renewed yearly once but card validity will be more.
What is late fee in credit card?
Late fee is the charges that levied on card holder due to delay in payment. Means whenever credit card payment is not completing with in the given due date these late fees will be charged. In general, for credit cards due date is 15-20 days after bill generation. please check the before posts if you want to know about billing cycle, statement date and due date.
what are interest charges on credit card?
In general interest will be charged on credit card if any delay payment made on the card or any Emi taken on the card. in first case if anyone paid due amount beyond the due date then along with late fee interest also charges on prorate basis. for all credit card annual interest fee will be approximately 35 to 40% per Anum. To avoid these kind of interest charges one should pay the due amount on or before due date. Then only credit card payment records show that you are using the credit card effectively.
what is cash advance fee on credit card?
cash advance fee is nothing but cash withdrawal charges which are levied on the credit card when money withdrawn from ATM. In general cash advance fee will be 2.5% of withdrawal amount or minimum 500/- whichever is higher. This money withdrawal facility given by the credit card is only to use in case of emergency conditions that to if you are ready to pay the charges. If you are withdrawing money using credit card along with cash advance fee (withdrawal charges) you’ll also get interest charges until money paid back to the card. So better not to withdraw money from ATM using credit card to avoid charges.
What is Over limit fee on credit card?
Over limit fee is the charges levied on the credit card when credit card used beyond given credit limit. Let’s say that if credit limit is given with 1 lack then one should not use the card beyond credit limit of 1 lakh. In some time, credit limit will automatically increase due to Emi and non-payment of credit card bill. for example, assume that your credit card limit is 1 lakh. If you total 1 lakh and not paying with in due date, then late fee interest charged on the card. With these charges credit card due goes beyond 1 lakh, then this over limit charges will come to picture. Soo better not to use total given credit limit to avoid over limit fee.
what is markup fee in credit card?
Whenever credit card used for international transactions then these markup fee will be charged. Markup fee is nothing but currency conversion charges. In general markup fee (FCY- Foreign currency markup fee) is 3.5% of the used amount. For some premium credit card FCY charges will be 2% only.
What is credit card redemption fees?
Redemption fee is the charges levied on the card when reward points are redeemed. In general redemption charges are 99/- + GST.
What is GST on credit card?
GST is goods and service tax levied on the credit card. In al credit cards GST is 18% (9% SGST+ 9% CGST). All kind of charges levied on credit card will add this GST mandatorily. Charges that will add GST are annual fee, renewal fee, late fee, issuance fee, interest, cash advance fee, processing fee, over limit fee, mark up fee and redemption fee. Soo any kind of extra charges will add this GST also.
