Credit cards offer a hassle-free way of making payments without thinking about how much cash one has in his/her hand. According to an RBI report, transactions made through POS terminals accounted for Rs.61,258 crore, which was a 30.2% rise in the 12 months period ending on May 2019. According to the central bank, around 10.3 million new credit cards were added to the system in 2019.

Using a credit card incurs some charges, but they are negligible compared to the perks a user can enjoy. Here are the types of credit card charges a user has to bear for using it.

Various Payments associated with credit cards

Annual fee: It is the fee users have to pay to enjoy the Benefits of Carrying a redit Card. But not every credit card charges this fee. Typically, cards that offer special privileges, charge this fee. For example, if anyone wants to use a credit card, which allows them, access to lounges in airports, hefty reward points, higher limit and other benefits they may have to pay an annual fee on their card. 

Late payment fee: When a user fails to pay his/her credit card bill within the grace period, they are liable to pay a late payment fee. This grace period is typically 15-20 days from the statement generation day.

Foreign transactions fee: This fee incurs when an individual uses his/her credit card outside of the country it is issued in. For instance, if an individual uses a credit card issued in India in Australia, they will be liable to pay this fee.

Cash advance fee: Users can use their credit cards to withdraw cash from ATMs in case of any shortage. But using this facility will incur a high interest rate on the withdrawn amount, and it is counted from the day of this transaction as it doesn’t have any grace period. This amount is added to their credit card balance. But, if anyone selects a Bajaj Finserv RBL Bank SuperCard, he/she can enjoy this facility with a grace period of 50 days.

How to reduce credit card payments?

These are some of the common types of credit card charges users face with their cards. Nonetheless, these charges are easily avoidable by following some easy measures. These are:

  • It is always advisable to pay the bill within the due date. Every credit card offers a repayment period which is typically 45-50 days. Paying up the due amount inside this time period will not incur any extra charges.
  • Individuals should never pay the minimum bill amount. This technique will allow users extra time to pay their entire due amount by just paying a portion of the whole debt. Even though it seems like a handy option, doing so invites additional debt in the form of interest charged on the due amount.
  • Users should not use their credit cards outside the country. Doing so leads to extra charges due to the foreign transaction fee on their cards.
  • If you are struggling to repay your credit card debt, you can opt for a balance transfer. Individuals who have more than one card can avail this option by transferring their due amount from one card to another. This method will allow individuals to opt for a repayment option that will charge lower interest.
  • Individuals can convert their due amount into EMIs. It is an easy option for repayment, but cardholders should contact their providers to know more about this process.

Sidestepping these charges is a sign of how to use a credit card wisely.  Credit cards are undoubtedly a handy payment option to have; it will not only save you in case of emergencies but also improve your credit score. Still, users can avoid some types of credit card charges  easily by following the above mentioned steps. 


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