5 Simple Ways to Avoid Credit Card Fees and Penalties in India
Credit cards offer incredible convenience, but they can also sneak up on you with fees and penalties if you're not careful. Here are five simple tips to avoid unnecessary charges and keep your wallet happy!
1. Pay Your Bills on Time
The most common fee is the late payment penalty. Indian banks charge anywhere between ₹100 to ₹1,300 for late payments. To avoid this:
- Set up autopay or reminders.
- Pay at least the minimum amount due before the due date.
Remember, timely payments also improve your credit score.
2. Stay Within Your Credit Limit
Exceeding your credit limit can attract an over-limit fee of 2.5%-3% of the amount over the limit. For example, if you overspend by ₹10,000, you could be charged ₹250-₹300!
Pro tip: Use only up to 30% of your credit limit for better financial health.
3. Avoid Cash Withdrawals
While tempting in emergencies, withdrawing cash on your credit card incurs hefty fees (2.5%-3.5% of the withdrawn amount) and starts accruing interest immediately.
If necessary, repay the amount as soon as possible to minimize interest charges.
4. Review Your Statements Regularly
Many people miss spotting hidden charges or fraudulent transactions on their statements. Check your statement every month to:
- Identify incorrect charges.
- Avoid repeated fees for subscriptions you no longer use.
Pro tip: SaveSage helps you keep track of your transactions and rewards in one place.
5. Know Your Card’s Terms and Conditions
Hidden fees often stem from ignorance. Understand your card’s:
- Annual fees and waiver conditions.
- Foreign transaction fees (often 3.5%).
- Interest rates on unpaid balances.
Being aware can help you make informed decisions, like using the right card for international travel or choosing a no-annual-fee card.
