Rishi Mehta was a younger advertising govt dwelling in Pune. Like lots of his friends, he’d simply began his skilled journey and was feeling empowered along with his first bank card—a shiny piece of plastic that gave him a way of economic freedom. He’d heard individuals rave about reward factors, cashback gives, and reductions, however what nobody advised him had been the prices hidden beneath the floor. Sadly, Rishi would solely find out about them when it was too late.
It began innocently. Rishi used his bank card to purchase a brand new telephone throughout a festive sale. “0% EMI” screamed the banner, and he clicked away and not using a second thought. However the first shock got here a month later, when he acquired his assertion and observed an EMI processing price of ₹999. Confused, he referred to as buyer care and was advised that even 0% EMI schemes usually got here with a one-time processing cost. That was lesson primary.
Subsequent month, he missed his cost due date by simply three days. He thought it wouldn’t matter, but it surely did. His subsequent invoice confirmed a late cost price of ₹750. Alongside that was an curiosity cost of practically ₹1,200! He was shocked. His mistake of not paying on time had value him dearly. He realized that bank card rates of interest can go as excessive as 36-42% yearly if dues aren’t cleared in full. From then on, he promised himself he would by no means miss one other due date.
However the surprises weren’t over. One weekend, whereas withdrawing money from an ATM, his debit card failed. Out of desperation, he used his bank card to withdraw ₹5,000. A couple of weeks later, his assertion confirmed a money advance price of ₹250 and curiosity of ₹500, despite the fact that he paid the total quantity later. Seems, curiosity on money withdrawals begins from day one, with no grace interval. One other costly lesson.
In March, Rishi determined to take a solo journey to Kerala. He booked his flight and lodge utilizing the bank card. Later, he realised he had crossed his credit score restrict barely whereas searching for journey gear. The end result? A “over-limit price” of ₹600. He hadn’t even recognized such a cost existed. Throughout his journey, he additionally used his bank card for worldwide transactions. Months later, he observed a international forex markup price on his assertion—2.5% of the transaction worth. For a lodge invoice of ₹30,000, that added as much as ₹750. If solely he had used a foreign exchange card, he might’ve saved this quantity.
By June, his card was practically maxed out. With bills piling up, he paid solely the “minimal due” proven on the invoice, pondering it might keep away from costs. However the subsequent month, his curiosity ballooned once more. That’s when he understood that paying simply the minimal quantity due doesn’t cease curiosity from accruing—it solely prevents late charges. He was nonetheless being charged curiosity on the remaining steadiness.
Making an attempt to get issues below management, Rishi determined to change to a card with decrease charges. However when he requested for a card cancellation, he was advised he should first pay all excellent dues and pending curiosity—despite the fact that he hadn’t made new purchases in weeks. He additionally found that closing a card too quickly might have an effect on his credit score rating, particularly if it was his oldest card. And lastly, Rishi realised he was additionally being charged an annual price—₹1,499 plus GST—for a card that he barely used for its premium advantages. It wasn’t even waived regardless of his spending.
By the top of the yr, Rishi sat down with a spreadsheet and tallied up all his avoidable bank card costs: over ₹5,000 in charges and ₹7,000 in curiosity. A painful, eye-opening quantity for a working skilled making an attempt to construct financial savings. From that day on, Rishi modified his credit score habits—setting reminders for due dates, avoiding money withdrawals, by no means overspending, and understanding each clause within the fantastic print.
| Varieties of Charges | Cost to be Borne |
| Annual Charges | 0-3% / flat price |
| ATM Withdrawal Charges | Rs 300 – 500 per transaction |
| Money Advance Charges | 2.5% – 3.5% of the quantity withdrawn |
| Late Fee Charges | Ranging between rs 100 to rs 1000 |
| Over Restrict Charges | 2 – 3% of the overlimit quantity |
| Steadiness Switch Charges | 1 -2 % of the transferred quantity |
| Overseas Transaction Charges | 1 – 3.5% of the transaction quantity |
| EMI Processing Charges | 1 – 2% |
| Card Alternative Charges | Between rs 100 to rs 250 |
Takeaway
Bank cards provide comfort, however with out consciousness, they’ll grow to be monetary traps. Fees like annual charges, late cost charges, curiosity on revolving balances, money advance costs, over-limit penalties, international markup charges, EMI processing costs, and the phantasm of minimal due—every can quietly chip away at your funds. Don’t study it the laborious manner like Rishi. Perceive earlier than you swipe.
Written by Roshni Mohinani
