In 2026, hidden credit card charges in India are quietly draining money from millions of users. While banks advertise cashback and rewards, many cardholders unknowingly pay extra fees that never get noticed until the statement arrives.
Understanding these hidden charges can help you save thousands of rupees every year and avoid unpleasant surprises.
1. Interest on Interest (Compounding Charges)
Many users don’t realise that:
- Interest is charged daily
- Unpaid interest itself attracts interest
- Paying minimum due increases total cost
This compounding effect makes credit cards one of the costliest borrowing tools.
2. Late Payment Fees (Even for Small Delays)
Missing the due date by even one day can result in:
- Late payment fee
- GST on the fee
- Higher interest rate impact
In 2026, RBI discourages excessive penalties, but charges still apply.
3. Cash Withdrawal Charges
Using a credit card at an ATM is expensive:
- Cash advance fee: 2.5%–3%
- Interest starts immediately
- No interest-free period
This is one of the most ignored credit card charges in India.
4. Foreign Currency Markup Fees
If you:
- Shop internationally
- Use international apps
- Pay in foreign currency
You are charged:
- 2%–3.5% forex markup
- Plus GST
This applies even to online subscriptions.
5. GST on Credit Card Charges
Many users assume GST applies to purchases. That’s incorrect.
GST (18%) is applied on:
- Interest charges
- Late payment fees
- Annual fees
- Cash withdrawal charges
GST is not charged on regular purchases.
6. Reward Redemption & Expiry Charges
Banks may charge:
- Redemption fee
- Processing fee
- Expiry penalties
Unused reward points can expire silently.
7. Over-Limit Penalties
Exceeding your credit limit can trigger:
- Over-limit fee
- Reduced CIBIL score
- Higher scrutiny by banks
Even small overuse can attract penalties.
How to Avoid These Hidden Charges
Smart card usage can eliminate most charges:
- Pay full dues every month
- Avoid cash withdrawals
- Monitor foreign transactions
- Track reward expiry
The biggest danger isn’t owning a credit card—it’s not understanding its charges. Knowing these hidden credit card charges in India (2026) helps you use credit smartly, not fearfully.
Always read your statement. Small lines hide big costs.
Also read : Best Mutual Funds to Invest in India 2025 – Beginner’s Guide
