Credit Card Fees Explained — Every Charge You Need to Know
Credit cards come with various fees beyond the annual charge. Understanding each fee helps you avoid surprises and choose the right card for your spending habits.
Joining Fee vs Annual Fee
The joining fee is a one-time charge when you receive the card. The annual fee is a recurring yearly charge. Many banks charge the same amount for both, but some offer the first year free (zero joining fee) while charging an annual fee from the second year. Always check if the annual fee can be waived based on spending thresholds — for example, many cards waive the fee if you spend ₹1–3 lakh in a year.
Interest Rate (APR)
If you don't pay your full statement balance by the due date, the bank charges interest on the remaining amount. Indian credit cards typically charge 30–42% per annum (2.5–3.5% per month). This is one of the highest interest rates on any financial product, so always try to pay in full. The interest-free period (typically 20–50 days) only applies if you clear each month's balance completely.
Late Payment Fee
Missing the minimum payment due by the due date triggers a late payment fee, typically ₹100–₹1,300 depending on the outstanding amount. Late payments also negatively impact your CIBIL score, which affects future loan and card applications.
Forex Markup
International transactions (online or in-person) attract a forex markup, typically 1.5%–3.5% of the transaction amount. This is on top of the exchange rate. Travel-focused cards often have lower forex markups (some as low as 0%), making them better for international purchases.
Cash Advance Fee
Withdrawing cash from an ATM using your credit card is expensive — banks charge 2.5%–3% of the amount (minimum ₹300–500) plus interest from the date of withdrawal with no interest-free period. Avoid cash advances unless absolutely necessary.
Fuel Surcharge
Fuel stations charge a 1%–2.5% surcharge on credit card payments. Many cards offer a fuel surcharge waiver (typically for transactions between ₹400 and ₹4,000) which refunds this charge. If you fuel up frequently, a card with surcharge waiver can save ₹200–400 per month.