The festive season is here, and you will see numerous offers (Festive Season Sales) everywhere. While many people will shop using cash, others will opt for credit cards.

If you are planning to use a credit card for your festive shopping, you need to be cautious. There are certain hidden charges associated with credit cards that can burn a hole in your pocket. Let’s take a look at these hidden charges.

What 7 things should you keep in mind?
1. High Interest Rates: If you frequently shop using a credit card, ensure you pay the bill on time. Otherwise, card companies may charge an annual interest rate ranging from 30% to 45%, significantly increasing your expenses. Therefore, spend only what you can afford to repay on time.

2. Late Payment Fee: Amidst the festive rush, it is easy to forget the bill payment date, leading banks to impose penalties ranging from ₹500 to ₹1,500. Such late fees not only hit your wallet but also negatively impact your credit score. Always pay your credit card bill before the due date.

3. Cash Withdrawal (Cash Advance Fee): Withdrawing cash from an ATM using a credit card is an extremely expensive move. There is no 'interest-free period' for this, and interest—potentially up to 48% annually—starts accruing from day one. Avoid the mistake of withdrawing cash using your credit card.

4. Over-Limit Fee: During the festive season, limit your credit card spending to your assigned credit limit. Even if a bank offers you an increased limit, do not accept it, as banks charge hefty fees for spending beyond the original limit. 

5. Forex Markup Fee: If you are shopping online from a foreign website or traveling abroad during the festive season, banks typically levy conversion charges ranging from 2% to 3.5%. Therefore, opt for cards that offer zero or very low forex markup fees for such transactions.

6. The Hidden Side of EMIs: Many people purchase goods using 'No-Cost EMI' schemes during the festive season. However, it is best to avoid these; while 'No-Cost EMI' may sound free, it often entails various hidden costs such as processing fees and platform charges.

7. Annual and Renewal Fees: Cards are sometimes marketed as 'free,' only for annual maintenance charges to be applied later. Always verify whether the card is free only for the initial period or if you will be required to pay a fee from the following year onwards.

Keep in mind that while goods may be cheaper during the festive season, this is no reason to overuse your credit card. Always pay your credit card bills on time to avoid the burden of additional charges.

PC Social Media