Rishi Mehta was a young marketing executive living in Pune. Like many of his peers, he’d just started his professional journey and was feeling empowered with his first credit card—a shiny piece of plastic that gave him a sense of financial freedom. He’d heard people rave about reward points, cashback offers, and discounts, but what no one told him were the costs hidden beneath the surface. Unfortunately, Rishi would only learn about them when it was too late.
It started innocently. Rishi used his credit card to buy a new phone during a festive sale. “0% EMI” screamed the banner, and he clicked away without a second thought. But the first surprise came a month later, when he received his statement and noticed an EMI processing fee of ₹999. Confused, he called customer care and was told that even 0% EMI schemes often came with a one-time processing charge. That was lesson number one.
Next month, he missed his payment due date by just three days. He thought it wouldn’t matter, but it did. His next bill showed a late payment fee of ₹750. Alongside that was an interest charge of nearly ₹1,200! He was shocked. His mistake of not paying on time had cost him dearly. He learned that credit card interest rates can go as high as 36-42% annually if dues aren’t cleared in full. From then on, he promised himself he would never miss another due date.
But the surprises weren’t over. One weekend, while withdrawing cash from an ATM, his debit card failed. Out of desperation, he used his credit card to withdraw ₹5,000. A few weeks later, his statement showed a cash advance fee of ₹250 and interest of ₹500, even though he paid the full amount later. Turns out, interest on cash withdrawals starts from day one, with no grace period. Another expensive lesson.
In March, Rishi decided to take a solo trip to Kerala. He booked his flight and hotel using the credit card. Later, he realised he had crossed his credit limit slightly while shopping for travel gear. The result? A “over-limit fee” of ₹600. He hadn’t even known such a charge existed. During his trip, he also used his credit card for international transactions. Months later, he noticed a foreign currency markup fee on his statement—2.5% of the transaction value. For a hotel bill of ₹30,000, that added up to ₹750. If only he had used a forex card, he could’ve saved this amount.
By June, his card was nearly maxed out. With expenses piling up, he paid only the “minimum due” shown on the bill, thinking it would avoid charges. But the next month, his interest ballooned again. That’s when he understood that paying just the minimum amount due doesn’t stop interest from accruing—it only prevents late fees. He was still being charged interest on the remaining balance.
Trying to get things under control, Rishi decided to switch to a card with lower fees. But when he asked for a card cancellation, he was told he must first pay all outstanding dues and pending interest—even though he hadn’t made new purchases in weeks. He also discovered that closing a card too soon could affect his credit score, especially if it was his oldest card. And lastly, Rishi realised he was also being charged an annual fee—₹1,499 plus GST—for a card that he barely used for its premium benefits. It wasn’t even waived despite his spending.
By the end of the year, Rishi sat down with a spreadsheet and tallied up all his avoidable credit card charges: over ₹5,000 in fees and ₹7,000 in interest. A painful, eye-opening number for a working professional trying to build savings. From that day on, Rishi changed his credit habits—setting reminders for due dates, avoiding cash withdrawals, never overspending, and understanding every clause in the fine print.
| Types of Fees | Charge to be Borne |
| Annual Fees | 0-3% / flat fee |
| ATM Withdrawal Fees | Rs 300 – 500 per transaction |
| Cash Advance Fees | 2.5% – 3.5% of the amount withdrawn |
| Late Payment Fees | Ranging between rs 100 to rs 1000 |
| Over Limit Fees | 2 – 3% of the overlimit amount |
| Balance Transfer Fees | 1 -2 % of the transferred amount |
| Foreign Transaction Fees | 1 – 3.5% of the transaction amount |
| EMI Processing Fees | 1 – 2% |
| Card Replacement Fees | Between rs 100 to rs 250 |
Takeaway
Credit cards offer convenience, but without awareness, they can become financial traps. Charges like annual fees, late payment fees, interest on revolving balances, cash advance charges, over-limit penalties, foreign markup fees, EMI processing charges, and the illusion of minimum due—each can quietly chip away at your finances. Don’t learn it the hard way like Rishi. Understand before you swipe.
Written by Roshni Mohinani
