Don’t you love the convenience and flexibility of instant credit? Credit cards are not only easy to use, but also earn you great rewards. Like most good things in life, they come with a price. Understanding the costs associated with a Credit Card can help you to make the most of it.
MPR is commonly known as the interest rate of a credit card. Any unpaid balance gets carried over to the next statement, and MPR gets levied on that. E.g., if your credit card has an MPR of 35%, you can calculate the daily interest rate by multiplying it by 12 and then dividing it by 365. And this gives you a daily interest rate of 1.15%. If you had an outstanding balance of Rs. 1000 on your card, you would be charged INR150.68 in daily interest. The more you repay on your monthly credit card bill, the less the interest your credit card will accrue. For more details, please refer to MITC.
Credit card fees is also known as annual fees or annual maintenance charge, credit card fees is an annual fee charged to use a credit card. In general, a card with higher annual fees offers more benefits and rewards than a card with lesser annual fees.For example, American Express ® Platinum Reserve SM Credit Card charges INR 5,000 plus applicable taxes in the First Year and INR 10,000 plus applicable taxes from the second year onwards. Cardholders enjoy a range of benefits, including exclusive golf entry and airport lounge use.
With careful financial management, you can sidestep attracting extra charges on your card. Most credit cards charge you an annual fee for their usage. But some waive off this fee if you use your card regularly and achieve a minimum spend in a given period. For example, American Express SmartEarn Credit Card offers a renewal fee waiver on an eligible spend1 of INR 40,000 and above in the previous year of Card Membership. Some basic cards may also come with a free membership , with no annual fees. The fees depend on the card category you choose. Here are some tips to help you avoid additional charges: