New Delhi | Jagran Business Desk: Credits cards are becoming increasingly popular among the urban population as they help in providing a lot of respite in the times of financial crunch. Credit cards are a better medium to meet immediate money needs during emergencies. However, there are some fees associated with these cards which are very high.

While a bank may claim that the credit cards are free, users must understand that there few hidden charges attached to the cards. Therefore, people using credit cards should be aware of these fees.

Here are the hidden charges that come with credit cards:

Maintainance Fee: Many banks offer free credit cards, which usually means that the joining fee and annual charges are waived off for the first year. However, post the initial 365 days, the bank starts charging a maintenance fee from the user. Before issuing a credit card, you must check whether the card is free for the first year or its entire lifetime.

Cash Advance Fee: While one can withdraw cash from the ATM using a credit card, it doesn’t come cheap. Withdrawing cash from credit card entails interest from the time the transaction is made and that can be as high as 2.5 per cent of the amount withdrawn. Finance charges on credit cards can be up to 49.36% per year depending on your card.

Late Payment Fees: Banks charge a flat fee when the credit card holder is unable to pay the minimum amount due in time. And there are also penalties for late payment. The minimum amount payable is calculated as 5 per cent of your outstanding balance. However, it can be higher if you have purchased something on EMI through a credit card, or have spent more than the credit limit.

Exceeding Limit Fees: Exceeding the limit assigned to the credit card comes at a cost. Whether user crosses the limit by one rupee or thousands, overdrawing the account will attract charges at a minimum of Rs 500, or more depending on the bank.

Posted By: Talib Khan