Costs Of Carrying A Credit Card: The Cost Come with It

Carrying a credit card comes with various costs that can impact your financial health. Understanding these costs is crucial for making informed decisions about Best Premium Credit Card usage. Credit card expenses include annual fees, interest charges, late payment fees, and more. So before further adue, let’s dive deep into the expenses that might be coming your way if you are a proud card holder.

Annual Fees

Many credit cards in India come with annual fees, which are recurring charges for the privilege of using the card. These fees can range from a few hundred to some thousand rupees, depending on the type of card and the benefits it offers. If there are luxuries involved, such as a gold membership, lounge access, and monthly gift vouchers, you can expect that keeping the card would be a little expensive as well.  

Interest Charges

When you carry a balance on your credit card, you’ll be subject to interest charges. In India, credit card interest rates can be quite high, often ranging from 24% to 42% per annum. It’s important to pay off your balance in full each month to avoid these costly charges. But, do know these charges will apply only when you miss your monthly credit card bill. If you do that, you are immune from the interest charges.

Late Payment Fees

Failing to make the minimum payment on your credit card by the due date can result in late payment fees. In India, these fees can amount to a significant sum and can also hurt your credit score. But don’t confuse it with the interest charges, these two are completely different. The interest will keep on growing as you won’t pay the bill amount. Whereas the late payment fee is a fixed amount that you need to pay when you finally decide to pay the outstanding balance plus interest.

Foreign Transaction Fees

If you use your credit card for transactions in a foreign currency, you may be charged a foreign transaction fee. This fee is typically a percentage of the transaction amount and can add up quickly, making international purchases more expensive. So whenever you are traveling abroad and thinking of using that plastic card in your wallet, do know it comes with a little price.

Cash Advance Fee

When it comes to credit cards, the cash advance feature provides a quick solution in emergencies, allowing you to withdraw cash from ATMs. However, this convenience comes with a price – the cash advance fee. This fee is typically a percentage of the withdrawn amount, often accompanied by higher interest rates compared to regular transactions. Unlike standard card transactions, cash advances usually start accruing interest immediately, offering no grace period. Additionally, there may be ATM withdrawal limits and currency conversion fees for international cash advances. To navigate these costs wisely, it’s crucial to understand your credit card’s terms, use cash advances judiciously, and explore alternative payment methods when feasible.


Carrying an SBI Credit Card or any other credit card can be convenient, but it’s essential to be aware of the costs involved. By understanding and managing these costs, you can make the most of your credit card while avoiding financial strain. Before choosing a credit card, carefully review the associated fees to select one that aligns with your financial habits and goals.