Credit card fees: Understanding the fine print

Posted on Friday, October 13th, 2023 | By IndusInd Bank

Although most credit cards function in the same way, there are subtle variances in the fine print that can have a significant influence. Understanding the fine print can help you sidestep errors related to fees, interest rates, or reward programme rules.

The phrase “fine print” denotes contract terms and conditions, disclosures, and other significant information that is found in footnotes or a supplemental document. It is usually not presented in the main body of the document.

When signing a contract, it is important to read and comprehend the entire document. It might contain information that the issuer does not wish to draw your attention to, but you must be aware of.

Understanding fine print

To fully comprehend the terms of the contract or the information given, it is crucial to read the fine print. In credit card agreements, the fine print often contains essential financial details such as the annual percentage rate (APR), introductory rate, duration of the introductory period, cash advances and balance transfers fees, annual fees, and penalties for late payments.

The terms and conditions or cardholder agreement for your credit card will contain the majority of the fine print. Depending on whether you apply directly with the credit card issuer, get a referral, or apply through a partner, the offers accessible to you may change.

What is usually covered under credit card fine print?

• Annual fees: The annual cost for a credit card will probably be clearly stated on the application, in credit card reviews, and in the cardholder agreement. You usually pay this fee when you first get the card, although some cards waive it for the first year to attract new customers.
  
  
• Purchase annual percentage rate (APR): The amount of interest charged on the purchase balance on your credit card will depend on the annual percentage rate.

If you pay your balance in full each month, you can avoid incurring interest.

On the other hand, the sum that you carry over from the prior billing cycle will begin to accumulate interest if you revolve a debt.

Until your credit card balance is fully paid off, interest will often start to accrue on all transactions.

• Rewards: Rewards categories include dining, shopping, fuel, travel, entertainment, etc. Card issuers may, however, define what they cover in each category differently.

One card issuer may classify air miles, hotels, concierge services and more under the umbrella of travel. Another might define travel much more narrowly, focusing on air travel, automobile rentals, cruises and hotels.

• Other fees: Pay attention to any costs for things like balance transfers, cash advances or late payments. Some of these fees are easy to dodge, while others might be inevitable depending on your spending habits. For instance, if your card has a foreign transaction fee, you will be charged every time you use it abroad.
  
  
• Credit limit: This is the most you can ever charge to your credit card in a single transaction. Your credit limit is determined by several variables, including your income, credit score, payback record, and previous debts. Steer clear of exceeding your credit limit as this could incur over-limit fees and negatively affect your credit score.
  
  
• Insurance cover: This feature gives you insurance protection for a range of situations, including stolen or lost credit cards, fraudulent transactions, personal accidents, difficulty during travel, and purchase protection. Depending on the card, the insurance coverage may differ and include/exclude specific things.
  
  
• Minimum payment: This refers to the minimum monthly payment you can make to keep the account in good standing. Paying the bare minimum, however, may incur excessive interest fees and extend the time it takes to pay off your balance. 

To efficiently manage credit cards and prevent unauthorised charges, it is essential to understand these credit card terms.

Tips for reading the credit card fine print

• Start with the summary of the terms: An overview of important terms is frequently included at the beginning of credit card agreements. This summary can give you a quick grasp of key details like your credit limit and APR.
  
  
• Be mindful of the minute details: Your credit card agreement’s fine print may be lengthy and full of legal terms. Therefore, it is crucial to thoroughly examine the specifics. Before you begin using your credit card, be sure you are familiar with its terms and fees.
  
  
• Ask questions for clarification: If you need more information on any part of your credit card agreement, don’t hesitate to ask the issuer. To obtain the information you require, speak with your credit card company or seek the advice of a financial expert.
  
  
• Keep a copy of your contract: Make sure your credit card agreement is stored somewhere safe. If you have inquiries or worries regarding your account in the future, you might need to refer to it.

Now that you have understood the importance of the fine print, you should focus on selecting a credit card that suits your lifestyle and provides you with attractive benefits. IndusInd Bank can be your trusted partner for selecting the ideal credit card for your needs. Let us take a look at the advantages of IndusInd Bank Credit Cards.

Why choose IndusInd Bank Credit Cards?

The credit cards from IndusInd Bank reward you for spending while meeting a variety of lifestyle needs.

• Some credit cards from IndusInd Bank offer the ‘lifetime free’ benefit. This means that you do not have to pay any joining or annual fees for using the card. This entails that you can take advantage of your credit card’s features without worrying about yearly fees. For instance, the IndusInd Bank Platinum Visa Credit Card is a lifetime-free credit card. Its added benefits include that it offers 1.5 reward points for every ₹150 spent.

• IndusInd Bank Credit Cards offer rewards and discounts on a range of categories, including dining, travel, shopping, entertainment, wellness, and more. You can benefit from free access to airport lounges, complimentary movie tickets, concierge services, dining deals, and more from different brands.
  
  
• On some credit cards, IndusInd Bank allows minimal or no foreign currency mark-up for international transactions. This implies that when you use your card overseas, you can save money on the exchange rate difference. Additionally, you can get instant approval on credit card applications, and the reward points you earn never expire. 

Summary

To effectively manage your credit card account and prevent unauthorised transactions, it is crucial to understand the terms and fees associated with your card. By diligently reading the fine print of credit card agreements, you can avoid nasty surprises and make informed financial choices. You may take charge of your money and utilise credit cards to benefit yourself by being aware of standard credit card fees, the terms and conditions, and by adhering to the stated rules. 

Once you have understood the fine print, take advantage of the features and services offered by IndusInd Bank. Apply for a credit card with IndusInd Bank and reap the benefits now!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.