The 6 charges β a guided tour
Short answer
Six charges do almost all the damage: interest (36β48% a year), late payment fee (up to ~βΉ1,300 per miss), cash withdrawal (~2.5% plus interest from day one), forex markup (~3.5% per foreign transaction), the annual fee (often waivable at a spend milestone) and a reward redemption fee (often ~βΉ99 plus GST). All figures indicative, as of 2026.
Card issuers make money from people who do not know these six. Here they are, in the order of how much they typically cost.
1. Interest (finance charges)
Typically 36β48% a year (indicative, as of 2026). Charged when you do not pay the Total Amount Due in full. It applies to your entire balance and switches off the interest-free period on new purchases.
This is the big one. Every other charge on this list is a rounding error next to it. Full detail β
2. Late payment fee
Up to around βΉ1,300 per miss, slab-based on the outstanding amount (indicative, as of 2026). Charged when payment arrives after the due date. Worse than the money: a sufficiently late payment is reported to the bureaus and dents your credit score. Full detail β
3. Cash withdrawal (cash advance) charge
Around 2.5% of the amount, plus interest from day one (indicative, as of 2026). Unlike purchases, cash advances have no grace period at all β the interest meter starts the second the ATM whirs. Full detail β
4. Forex markup
Typically around 3.5% plus GST on every foreign-currency transaction (indicative, as of 2026). It applies to international travel and to foreign websites billing from abroad β which catches many people who never leave the country. Full detail β
5. Annual / renewal fee
βΉ0 to βΉ10,000+ depending on the card. Very often waivable at a spend milestone that is mentioned once, in the brochure, and never again. Full detail β
6. Reward redemption fee
Often around βΉ99 plus GST per redemption (indicative, as of 2026). Yes β some banks charge you a fee to use the points you earned. It quietly shaves your real reward rate. Full detail β
Putting the six in perspective
| Charge | Typical size | Trigger |
|---|---|---|
| Interest | 36β48% a year | Not paying in full |
| Late fee | Up to ~βΉ1,300 | Paying after the due date |
| Cash advance | ~2.5% + immediate interest | Withdrawing cash |
| Forex markup | ~3.5% + GST | Foreign-currency spend |
| Annual fee | βΉ0 β βΉ10,000+ | Holding the card |
| Redemption fee | ~βΉ99 + GST | Redeeming rewards |
All figures indicative, as of 2026, and varying by bank and card.
All figures on this page are indicative and dated. Rates and fees differ by bank and change over time. Always verify with your bank's official schedule of charges.
Frequently asked questions
Which credit card charge costs Indians the most?
Interest on unpaid balances, by a wide margin. At a typical 3β4% a month it dwarfs every fixed fee on the list, and it is the one charge that compounds month after month until the balance is cleared.
Are credit card charges negotiable?
Some are. Banks will often reverse a first late fee as a goodwill gesture if you call and ask, and annual fees are frequently waived on request or on hitting a spend milestone. Interest already charged is rarely reversed, which is why prevention matters more than negotiation.
Sources
The regulation and official pages this page is checked against. If one of them disagrees with us, it wins.
- Master Direction β Credit Card and Debit Card (Issuance and Conduct) Directions, 2022 β Reserve Bank of India
- FAQs on the Credit Card and Debit Card Master Direction β Reserve Bank of India
Keep learning
Written and checked by the CardSamajh editorial desk Β· Last reviewed: Β· How we check this