5 Credit Card charges: Credit cards can be quite useful for making purchases and possibly receiving incentives. Additionally, they assist in establishing your credit history. Free credit cards, on the other hand, do not exist. Credit cards have a number of terms and conditions because they are a kind of borrowing. Most of you simply consider the card’s annual cost, but there are various fees and charges that you should be aware of. In this article, we will tell you about five charges that you must pay for if you have a credit card.
5 Credit Card charges
Annual Fee
The yearly cost is not, in fact, a “hidden” fee. The annual fee is charged once a year and is priced differently for each card. The credit card will never have an annual or joining charge because banks periodically give them away for free. Simply choose an annual fee card to avoid paying a fee each year. In such a situation, if you currently have an annual fee card, you have the option to request a retention offer or downgrade to a card with a lower or no annual fee.
Over-limit fee
You may or may not be able to go over the predetermined spending limit, depending on the type of credit card you have. Banks charge you a hefty amount as an over-limit fee rather than allowing you to do this for free. Most banks charge a minimum of Rs. 500.
Late Payment fee
Banks provide you the option of paying the minimum payment if you are unable to pay the full amount due; but, if you are unable to do so, the bank will charge a late payment fee. Your statement balance will be used to determine how much to charge. By paying the full amount of the bill or the minimum amount due on or before the due date, this can be prevented.
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.
penalties and charges
You must accept a lot of terms and conditions when applying for a credit card, and if your application is approved, you will receive a long cardholder agreement in the mail. These documents include a list of all possible fees associated with credit card use. Knowing the numerous fees you pay is crucial so you can either lower them or do away with them entirely. Here is a list of typical credit card fees along with information on how to avoid them.
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