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8 different Service charges levied by the banks for using Credit Cards


At least one person in a family avails the services offered by the credit card, but do you know, there are different charges levied on us, for not using the credit cards properly. Sometimes, you will end up with the high rates/charges levied by them. Beware about the different charges by reading the post below.

List of Credit Card Service Charges

  • MAD
  • Maintenance Fees
  • Grace Days
  • Finance Charges
  • Cash Advance Charges
  • Late Payment Charges
  • Payment Return Charges
  • Rewards Redemption Fee

Let's go in detail for each

MAD : 

The Full form of the MAD is Minimum Amount Due. This will be calculated based on the billing amount for a month, where it will be 5% of total amount due or INR 200 for most of the Credit Cards.

Maintenance Fees:

There will be Annual Maintenance Fees for most of the privilege services offered by the bank.
Here are the fees incurring by the HDFC and SBI.

                                             HDFC SBI
Annual Maintenance Fees 500 + Tax(18%) INR 500
Card Renewal Fee               500 + Tax(18%)          INR 300
Reissue of card                    INR 100 INR 100

Grace Days:

Grace Days is the no of days exempt for the Payment Processing. Even though your bill date is 28th of the every month, there will be grace period of 3 days, which requires for the payment processing and no charge levy on it. Note that few banks don't support this.

Finance charges:

This is the charge levied by the bank until the total amount due has been paid by you. If you pay only the partial amount, the remaining amount & outstanding amount will also attract the Finance charges.

HDFC Finance charges: Up to 3.49% per month, accounting to 41.88% per annum, from the date of transaction.

A note from the HDFC website.
"If a Cardholder avails of the revolving credit facility of the HDFC Bank Credit Card and hence chooses to pay an amount less than the total amount due reflected in the monthly billing statement, the entire outstanding amount would attract finance charges and all new transactions will also attract finance charges till such time as the previous outstanding amounts are repaid in full."

Cash advance charges:

There will be a Cash Limit, of around 40% on the total available amount eligible by you, which means, you can withdraw this amount through ATM's. But note that,
the charges levied on the cash advance will be around 2.5% of amount withdrawn or min of 300-500 whichever is higher. If you withdraw less than 12K from Credit Card, you will be charged around 300.

Late Payment Charges:

If the bill has unpaid by the bill date, these charges will be incurred. If the billed amount is more than 10K, the late payment charges will be INR 700 - 800.

Payment return charges:

This charge will be levied when the payment has bounced back due to insufficient funds. Beware that if the payment is scheduled, ensure the source account have sufficient funds. This charge will be around of 2% of total billed amount or INR 450. If the outstanding amount is less than INR 22,500, you will be charged INR 450.

Rewards Redemption Fee

Even though every bank offers the Rewards for every transaction, usually 1 reward point for INR 100, there will be a charge of (INR 99) for redeeming the rewards points. This amount will be credit back to the credit card and exempted in the billing cycle.

Little savings - Credit Cards
*All the above interest rates are taken into account by comparing the HDFC Moneyback Card and SBI IRCTC card.

If you want to know about the charges of your credit card, post the card details you would like to know in the comments section like Bank Name(HDFC, SBI, Citi), Type of Card(Platinum, Silver), Category of Card(IRCTC, Moneyback) etc.,
Don't underestimate the power of Credit Card, there are plenty of uses of the Credit Card, if used it properly.


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