Credit card: In the nuclear family age where we have less contacts to support us financially in our harrowing time credit card plays an important role and has emerged as a great asset to fix or financial problems. Credit card is a one solution for unexpected and unavoidable expenditure. It meets the demand of modern lifestyle.
Credit cards come with a number of fees that, if you miss a payment, go over your limit, or do anything other than make regular purchases, may add up to a significant amount of money.
Credit cards have grown to be a vital component of modern lifestyle needs as a result of their widespread use. Cardholders can choose between paying in full for purchases, deferring payment through EMIs, and repaying loans.
When you apply for a credit card, you must accept a variety of terms and conditions, and if your application is approved, you will receive a lengthy cardholder agreement in the mail. Every fee that might be charged while using a credit card is listed in these publications. It’s important to be aware of the various fees you could incur so you can either lower or eliminate them entirely. Here is a list of typical credit card fees, along with information on how to avoid them. If you have missed your credit card payment due date, you can make the payment within three days of the due date and avoid late payment penalty.
The annual charge is not, in fact, a “hidden” charge. The cost of the yearly fee varies depending on the card and is applied once a year. A credit card will never have an annual or joining charge if it is given away for free by a bank on occasion. Simply choose an annual fee card if you want to avoid paying an annual cost. You can choose to seek a retention offer or downgrade to a card with a lower or no annual fee if you currently have an annual-fee card.
Rate of Interest:
Interest is charged if you don’t pay off the entire balance on your credit card each billing cycle. Your annual percentage rate and the amount of interest you pay are detailed in your cardholder agreement. However, this is only valid if you do not pay the full amount owed. The simplest way to avoid interest is to make a full payment on your bill each month. If you can’t pay your payment in full, cut back on your spending or choose a credit card with a 0% APR that doesn’t charge interest for up to 21 months.
Depending on the type of credit card you have, you may or may not be able to go over the predetermined spending limit. Banks charge you a significant sum as an over-limit fee rather than allowing you to do this for free. Most banks have a minimum fee of Rs. 500.
Although credit card issuers brag about how widely their cards are accepted, they rarely reveal the extra fees (sometimes referred to as a foreign currency markup fee) that apply to transactions made outside of their home country. Depending on the card, a different fee may apply, which is frequently calculated as a percentage of the transaction’s value. If your credit is mediocre, think about getting a credit card with no overseas transactions to prevent this.
Late payment fee:
Banks give you the option of paying the minimum amount if you are unable to pay the full amount due; but, if you are unable to do so, the bank will assess a late payment fee. Your statement balance will be used as the basis for charging it. Paying the full amount of the bill or the minimal amount due on time will prevent this.