Published on:
2025-03-04T06:35:40P+05:30
10 Essential Credit Card Charges to Remember Before Applying in 2025
Credit cards have become an essential tool for managing personal finances, offering convenience, flexibility, and a range of benefits, including rewards and cashback.
However, behind the allure of these perks, there are several credit card charges that could quickly add up and affect your financial health. Understanding these fees is key to making informed decisions when applying for a credit card in 2025.
This article covers the top 10 credit card charges you should be aware of in India before applying. It will also help you compare fees across different credit card options so you can maximize your benefits while minimizing unnecessary costs.
What Are Credit Card Charges?
Credit card charges refer to the fees that credit card issuers impose on users for various services and actions, such as carrying a balance or making late payments. These charges are in addition to any interest rates, and they can significantly impact your finances if not managed correctly.
Before applying for a credit card, it’s essential to be aware of these fees so you can choose the card that best suits your spending habits and financial goals. To make things clearer, we’ve outlined the most common credit card fees below.
Common Credit Card Charges in India
When applying for a credit card in India, here are the common fees to keep an eye on:
1. Annual Fee (Membership Fee)
Many credit cards come with an annual fee that can range from ₹500 to ₹10,000 or more, depending on the type of card. Premium cards with higher rewards often carry higher annual fees. However, many credit cards offer a waiver of the annual fee if you meet a certain spending threshold.
2. Interest Charges (APR)
If you carry a balance on your credit card from one billing cycle to the next, the issuer will charge interest at a rate known as the Annual Percentage Rate (APR). The APR for credit cards in India typically ranges between 12% and 42%, depending on the card type and issuer.
3. Late Payment Fee
Missing a payment on your credit card can result in a hefty late payment fee, which can range from ₹300 to ₹1,000. Additionally, late payments can hurt your credit score, which may affect your ability to get favorable loan rates in the future.
4. Foreign Transaction Fee
If you use your credit card for international purchases or in a foreign currency, you’ll likely incur a foreign transaction fee, typically 1.5% to 3% of the transaction amount. It’s important to check if your card charges this fee before traveling abroad.
5. Cash Advance Fee
If you withdraw cash from an ATM using your credit card, you'll be charged a cash advance fee. This fee is typically around 2.5% to 3% of the amount withdrawn, along with a higher interest rate than regular purchases.
6. Over-Limit Fee
If you exceed your credit limit, you might be charged an over-limit fee. Although many banks no longer charge this fee due to RBI guidelines for credit card swipe charges, it's still important to be cautious about your credit limit.
7. Reward Redemption Fees
Some credit cards charge a reward redemption fee when you redeem your points for rewards or cashback. This fee is typically low but can accumulate over time if you frequently redeem rewards.
8. Balance Transfer Fee
If you're transferring your balance from one credit card to another, you'll incur a balance transfer fee, which usually ranges from 3% to 5% of the transferred amount. While it may seem like a small fee, it can add up if you’re transferring a large balance.
9. Card Replacement Fees
If your credit card is lost or stolen, you may need to pay a card replacement fee to receive a new one. The fee varies but is typically around ₹200 to ₹500.
10. Returned Payment Fee
If a payment you make is returned due to insufficient funds or other issues, you may be charged a returned payment fee. This fee can be anywhere from ₹300 to ₹1,000.
10 Credit Cards Comparison Table for 2025: Essential Fees & Charges
Below is a comparison table featuring some of the top credit cards in India, along with their essential fees:
| Credit Card Name |
Annual Fee (Joining/Renewal) |
Interest Rate (APR) |
Foreign Transaction Fee |
Cash Advance Fee |
Balance Transfer Fee |
Late Payment Fee |
| SBI Cashback Credit Card |
₹999/₹999 |
18% |
3.5% |
2.5% |
3% |
₹500 |
| Axis Bank Ace Credit Card |
₹499/₹499 |
15% |
2% |
2.5% |
3% |
₹400 |
| HDFC Bank MoneyBack Credit Card |
₹500/₹500 |
23.88% - 43.2% |
3.5% |
2.5% |
3% |
₹600 |
| ICICI Amazon Pay Credit Card |
₹0/₹0 |
42% - 45.6% |
3.5% - 3.8% |
2.5% |
3% |
₹500 |
| IDFC FIRST Classic Credit Card |
₹199/₹199 |
10.99% - 18% |
1.5% |
2% |
2.5% |
₹300 |
| Axis Bank Select Credit Card |
₹3,000/₹3,000 |
55.55% |
2.5% |
2.5% |
3% |
₹700 |
| HDFC Bank Diners Club Prime Credit Card |
₹2,500/₹2,500 |
18% |
1.5% |
2% |
2.5% |
₹450 |
| ICICI Bank Platinum Chip Card |
₹199/₹199 |
3.5% - 3.8% |
2% |
2.5% |
3% |
₹400 |
| IDFC FIRST Wealth Credit Card |
₹4,999/₹4,999 |
10.99% - 18% |
1.5% |
2% |
2.5% |
₹500 |
| Axis Bank Burgundy Private Credit Card |
₹0/₹0 |
0% |
0% |
0% |
0% |
₹0 |
Note: Fees and charges are subject to change. It's advisable to verify the latest details with the respective banks before applying.
How Much Does a Credit Card Cost Per Month?
The cost of using a credit card can vary widely depending on your spending habits and the fees associated with the card. On average, you might expect to pay:
- Annual Fees: If your card has an annual fee of ₹2,000, your monthly cost will be around ₹167 (excluding any other charges).
- Interest Charges: If you carry a balance, the interest charges can be significant. For instance, if you carry a ₹10,000 balance and the APR is 18%, your monthly interest would be approximately ₹150.
Therefore, it's crucial to calculate your total monthly cost by factoring in these charges.
Expert Tips for Minimizing Credit Card Fees
- Pay on Time: Avoid late payment fees and interest charges by paying your balance in full each month.
- Look for No Annual Fee Cards: Some cards, like the 10 Best Credit Cards for Shopping with No Annual Fee, offer great benefits without the extra cost.
- Take Advantage of Reward Points: Maximize rewards by choosing cards that offer the best cashback or loyalty points for your spending habits.
- Read the Fine Print: Always check for hidden charges and fees in the terms and conditions before applying for a card.
For those interested in credit cards for balance transfers, many cards offer low introductory balance transfer fees, helping you manage existing credit card debt more effectively.
By understanding and comparing credit card fees, you can avoid unnecessary charges and make the most of your credit card. Keep an eye on credit card fees in India, and always consider your financial goals when applying for a credit card.
Whether you’re looking to maximize rewards or minimize interest payments, knowing these essential charges will help you make informed choices in 2025.
This article is designed to provide a clear overview of credit card charges in India and offer actionable tips to avoid common pitfalls. For further details on RBI guidelines for credit card swipe charges, visit the official RBI website.
FAQ for Essential Credit Card Charges In India
1. What are the most common credit card charges in India?
The most common credit card charges in India include annual fees, interest charges, late payment fees, foreign transaction fees, and cash advance fees.
2. How can I avoid credit card fees?
To avoid credit card fees, ensure timely payments, choose cards with no annual fees, avoid foreign transaction fees, and pay your balance in full to prevent interest charges.
3. What is the average credit card interest rate in India?
Credit card interest rates in India typically range from 12% to 42%, depending on the card type, issuer, and your credit profile.
4. Are there any credit cards with no annual fee in India?
Yes, there are several credit cards in India with no annual fees, such as the ICICI Amazon Pay Credit Card and the Axis Bank Ace Credit Card.
5. What happens if I miss a credit card payment?
Missing a payment can result in late payment fees, higher interest rates, and potential damage to your credit score.
6. How much does a credit card cost per month?
The monthly cost of a credit card can vary, including annual fees (divided by 12), interest charges (if you carry a balance), and other charges like foreign transaction fees or late fees.
7. What are the top credit cards in India for 2025?
The top credit cards in India for 2025 include SBI Cashback Credit Card, Axis Bank Ace Credit Card, HDFC MoneyBack Credit Card, and ICICI Amazon Pay Credit Card.
8. How can I maximize rewards on my credit card?
To maximize rewards, use your credit card for daily purchases, pay on time to avoid interest, and choose cards that offer bonus rewards for specific categories like dining, travel, or shopping.
9. What is the difference between a balance transfer fee and a cash advance fee?
A balance transfer fee is charged when you transfer an existing balance from one card to another, while a cash advance fee applies when you withdraw cash using your credit card.
10. Are credit card fees the same for every bank?
No, credit card fees can vary significantly between banks and card types. It’s important to compare fees before choosing a card to ensure it aligns with your needs.
11. Can I negotiate credit card fees with my bank?
In some cases, it may be possible to negotiate fees, especially if you're a loyal customer. Contact your bank's customer service to inquire about fee waivers or reductions.