5 Simple Ways to Avoid Credit Card Fees and Penalties

Here are five simple and practical ways to avoid unnecessary credit card charges and keep your spending under control.

1. Pay Your Credit Card Bills on Time

Late payment fees are the most common credit card penalty. In India, banks usually charge anywhere between ₹100 and ₹1,300 if you miss the due date.

• Set up auto-debit or payment reminders
• Always pay at least the minimum amount due before the due date
• Timely payments also help improve your credit score

2. Stay Within Your Credit Limit

Spending beyond your credit limit can lead to an over-limit fee of around 2.5%–3% on the excess amount. For example, if you exceed your limit by ₹10,000, you may be charged a penalty of ₹250–₹300.

To avoid this, try to use only up to 30% of your total credit limit. Keeping utilisation low not only helps you avoid penalties but also supports better financial health.

3. Avoid Credit Card Cash Withdrawals

Withdrawing cash using a credit card should be avoided unless absolutely necessary. These transactions attract high fees and immediate interest.

• Cash withdrawal fee of around 2.5%–3.5% of the amount
• Interest starts immediately, with no grace period

If you ever need to withdraw cash, repay the amount as soon as possible to reduce interest charges.

4. Review Your Credit Card Statements Regularly

Many people miss hidden charges or even fraudulent transactions because they don’t review their credit card statements carefully. Regularly checking your statement helps you spot incorrect or unfamiliar charges early.

It also allows you to identify subscriptions you no longer use and notice repeated fees before they add up to a larger amount.

5. Understand Your Card’s Terms and Conditions

Unexpected fees often come from not knowing how a card works. Take time to understand key charges such as:

• Annual fees and waiver conditions
• Foreign currency transaction fees (usually around 3.5%)
• Interest rates on unpaid balances

  Knowing these details helps you choose the right card for each situation, such as using a low-forex card for international travel or avoiding cards with high annual fees.

Using Credit Cards Without Extra Charges

Avoiding and managing credit card fees payments doesn’t require complex strategies. Simple credit card tips and habits like paying on time, staying within limits, and reviewing statements regularly can save you a lot of money.

With a little awareness and discipline, credit cards can remain a helpful financial tool instead of becoming a source of penalties and stress.

Multiple card holders often find it difficult to keep a tab of their billing cycle and manage their credit card points and rewards. In this case, it is recommended to use the AI powered credit card assistant like SaveSage app that brings all your cards, reward points, and offers in one place.