Credit cards are convenient - we can shop online, at stores and pay for periodic subscriptions. Credit cards are great when you have a steady source of income that can easily support the monthly bills.
However, the darker side of credit cards starts revealing when you lag on your bill payments. Credit cards quickly turn from a free cash advance into a very costly loan, with hefty fees and long lasting repercussions of delays.
Below we help you understand exactly how banks charge for credit card delays.
Credit Card Fees
| Joining and Annual fees || Varies by credit card |
| Late payment fees || Depends on outstanding amount and bank, can go upto Rs 750 for Rs 10,000 or more outstanding |
| Interest rates |
(Annualized Percentage Rate)
| Varies by credit card,typically 36% - 42% APR (Annualized Percentage Rate)|
| Fresh Credit Interest || Varies by credit card, typically 36% - 42% APR |
Things to remember
Credit card interest is charged even when a part of the bill is outstanding. Even if you pay the minimum amount due, the interest is still charged on the remaining unpaid amount.
When you have outstanding amount that is past due date, any new expenditure is charged the interest rate (typically 36-42%), from the day of expenditure to the date when you repay the dues. Credit card becomes a ultra high interest running loan at that point!
Credit card delays affect your credit score, making credit card or future loans costlier or even infeasible.