Credit Card Charges in India: Fees, Interest & GST 2026

Most people only notice credit card charges in India when a bill comes in higher than expected. A late fee here, some interest there, and a cash withdrawal that costs more than the cash itself.

The main credit card charges are the annual fee, interest on unpaid bills, late payment fees, cash withdrawal fees, forex markup, over-limit fees, EMI processing fees, and GST. Most of them can be avoided by paying your full bill on time and not using the card for cash. This article explains each one in plain words, with real SBI Card numbers, so you know exactly what you’re paying for.

Credit Card Charges Quick Overview

Common 12 Types of Credit Card Charges

1. Joining and annual fee

This is what you pay to keep the card. Some cards charge it once when you join and then every year. Lifetime free cards, like the Amazon Pay ICICI Credit Card, charge nothing.

The credit card annual fee usually grows with the benefits. The SBI Cashback Card costs ₹999 + GST a year, which is about ₹1,179 in total. The SBI Card ELITE costs ₹4,999 + GST, because it adds lounge access and lower forex charges.

Most cards waive the next year’s fee if you spend a set amount. Check this target every year, because banks can raise it. From 1 May 2026, for example, the BPCL SBI Card needs ₹1 lakh of yearly spending to reverse its ₹499 fee, up from ₹50,000 earlier.

2. Interest (finance charges)

If you don’t pay your full bill by the due date, the bank charges interest on what’s left. These finance charges are the highest cost on most cards.

SBI Card charges up to 3.75% a month on its regular cards, which works out to 45% a year. Two things make it costlier than it looks:

Interest starts from the date of each purchase, not from the due date.
You lose the interest-free period on new purchases until your full balance is cleared.

For example, if ₹10,000 stays unpaid for a month, interest at 3.75% is ₹375. Add 18% GST, and you pay about ₹443. To see how interest is worked out on each transaction, including the daily calculation, look at the bank’s own example in your card’s MITC.

3. Late payment fee

If you don’t pay at least the minimum amount due by the due date, a late fee is added. The fee depends on how much you owe.

SBI Card changed its credit card late payment charges from 1 May 2026, as per its late payment charges notice:

Dues between ₹1,000 and ₹50,000 fall into slabs in between. GST is added to every late fee. SBI Card can also charge an extra ₹100 if you miss the minimum due for two billing cycles in a row.

Small dues aren’t safe anymore. An ₹800 bill paid late now costs ₹500 plus ₹90 GST, which is ₹590 extra.

4. Cash withdrawal (cash advance) fee

You can take cash from an ATM with a credit card, but it’s one of the costliest things you can do with it. SBI Card charges 2.5% of the amount or ₹500, whichever is higher, as shown on its cash withdrawal charges page. Interest at 3.75% a month starts from the day you take the cash. There’s no interest-free period.

Here’s what ₹5,000 in cash costs if you repay it after about a month:

That’s over 16% of the cash you took, in just one month.

5. Over-limit fee

An over-limit fee applies when your spending goes above your credit limit. Under RBI rules, a bank can allow this only if you have given clear consent to use your card beyond the limit. If you haven’t, the transaction should simply be declined.

If you have opted in, SBI Card charges 2.5% of the amount above your limit or ₹600, whichever is higher, once per billing cycle, as listed in SBI Card’s key fact statement. Going ₹4,000 over your limit would cost ₹600 plus ₹108 GST. You can usually turn this option on or off in your card’s app.

6. Foreign currency markup (forex fee)

When you pay in a foreign currency, on a trip abroad or on a foreign website, the bank adds a forex markup on top of the exchange rate.

SBI Card charges 3.5% on most of its cards and 1.99% on cards like SBI Card ELITE, AURUM, and IndiGo SBI Card ELITE. On a ₹10,000 foreign payment:

• At 3.5%: ₹350 + ₹63 GST = ₹413
• At 1.99%: ₹199 + ₹36 GST = ₹235

Two more things to watch:

• Paying in rupees abroad isn’t always cheaper. Some shops and websites abroad offer to charge you in rupees. This is called dynamic currency conversion, and their exchange rate is often worse. Choose the local currency when asked.
• Some banks charge a fee even when you pay in rupees to a business registered outside India. Check your MITC if you pay for foreign apps or services.

7. Fuel surcharge

Petrol pumps usually add a fuel surcharge of about 1% when you pay by card. Many cards refund this surcharge, but only on transactions within a set amount range and up to a monthly limit. Above that limit, you pay the surcharge yourself.

8. Fees on rent, wallet and education payments

These are the hidden credit card charges that catch most people off guard, because they’re added to normal-looking payments. From November 2025, SBI Card started charging:

• 1% on education fees paid through third-party apps like CRED, Cheq, or MobiKwik
• 1% on wallet loads above ₹1,000

Many cards, including SBI, also charge a credit card processing fee on rent paid through apps. Education fees paid directly on a school or college website usually don’t carry this 1% fee on SBI Card. Check your card’s terms before paying rent or fees with it.

9. EMI and balance transfer charges

Converting a purchase to EMI after you’ve bought it usually has a processing fee, interest, and GST. Closing the EMI early can also bring a foreclosure fee.

No-cost EMI at checkout is different. The seller covers the interest through a discount, but you may still pay a processing fee and GST on the interest part. Check the final amount you’ll pay before you confirm.

Balance transfer means moving your unpaid balance from one card to another at a lower rate. It comes with a processing fee. Compare that fee with the interest you’d save before you go ahead.

10. Reward redemption fee

Some banks charge you to use your own reward points. SBI Card charges ₹99 per redemption request on gifts, statement credit, and selected vouchers. To keep this cost low, redeem points in fewer, bigger requests. You can check how SBI reward points are redeemed and which options carry the fee.

11. Payment method fees

How you pay your bill can also cost you. As per SBI Card’s key fact statement:

• Cash payment at a branch: ₹250
• Cheque payment: ₹200
• Failed payment (cheque bounce or auto-debit failure): 2% of the payment amount, at least ₹500

Paying through UPI, net banking, or the card’s app avoids all three. Keep enough balance in your account if you use auto-pay, or a failed debit will cost you ₹500 or more.

A few other small charges exist too. Replacing a lost or damaged card usually costs a small fee, and some banks charge for copies of old statements. Recent statements are free in the app.

12. GST on credit card charges

GST on credit card charges is 18%. It’s added to almost every charge above, including the annual fee, late fee, cash withdrawal fee, forex markup, and interest. Your statement shows it as a separate line.

GST is a government tax, so the bank can’t waive it on its own. If the bank reverses a fee, the GST on that fee is reversed too.

How Charges Add Up in One Bad Month

Each charge looks small on its own. The real damage comes when a few of them hit together.

Say your SBI Card statement shows ₹55,000 due: ₹50,000 in purchases and ₹5,000 in ATM cash. You miss the due date completely and pay after about a month.

This is a simple example with rounded numbers. Your real amount depends on your exact purchase dates and when you pay.

The Minimum Due Trap

Paying the minimum amount due stops a late fee. But it doesn’t stop interest. Interest keeps running on almost the full balance, and GST is added to that interest every month.

Here’s what happens if you owe ₹15,000, stop using the card, and pay only the minimum due each month. This example assumes 3.75% monthly interest, 18% GST on the interest, and a minimum due of 5% of the balance or ₹250, whichever is higher:

After a full year of payments, you’ve cleared less than ₹1,400 of the original amount. The way banks calculate the minimum due varies, so your numbers will differ. Your card statement also shows how long repayment will take if you pay only the minimum.

If you’re not sure how the billing cycle and minimum due work, it’s worth understanding before you ever carry a balance.

Hidden Credit Card Charges People Miss

Beyond the 12 charges above, these small rules add cost without most people noticing:

• Interest on new purchases. Once you carry a balance, even new purchases start collecting interest from day one.
• Rising fee waiver targets. Banks can increase the spend needed to waive your annual fee.
• Over-limit fees stay. SBI Card doesn’t reverse an over-limit fee even if the purchase is refunded later.
• GST on everything. A ₹500 fee is really ₹590 once GST is added.
• Fees on payments you’d expect to be normal, like rent, wallet loads, and education fees through apps.

How Credit Card Charges Affect Your CIBIL Score

The fees themselves don’t lower your CIBIL score. What caused them can.

• A payment more than 3 days late can be reported to credit bureaus as a late payment.
• Carrying a big balance raises how much of your limit you’re using, which can lower your score.
• Applying for many cards in a short time to escape one card’s fees adds hard enquiries to your report.

How to Avoid Credit Card Charges

1. Pay the full bill by the due date. This removes interest and late fees.
2. Set up auto-pay for the full amount, and keep enough balance in your account.
3. Never use the card for ATM cash. Use your debit card or UPI from your bank account instead.
4. Turn off the over-limit option in your card’s app if you don’t need it.
5. Pay in the local currency abroad, and use a low-forex card if you travel often.
6. Pay rent, wallet loads, and education fees directly from your bank account if your card charges extra for them.
7. Track your fee waiver target every year.
8. Redeem reward points in fewer, bigger batches if your card charges per redemption.

It also helps to weigh the annual fee against what a card gives back in cashback and perks. A higher fee can make sense if you use the benefits, and a free card isn’t better if it doesn’t fit how you spend.

Charges to Check Before You Apply for a Card

Before you apply, read these parts of the card’s MITC:

• The annual fee and the exact spend needed to waive it
• The monthly interest rate
• The full late fee table
• The forex markup
• Fees on rent, wallet loads, utility bills, and education payments
• The reward redemption fee
• EMI processing and foreclosure fees

Fee structures differ a lot between each card category. Premium and travel cards often charge more upfront but less on forex, while basic cards do the opposite.

Your Rights Under RBI Rules

RBI’s credit and debit card directions for banks protect you in a few useful ways:

• A 3-day buffer. A bank can charge a late fee or report you as late only if your payment is more than 3 days past the due date. Interest can still apply, so don’t rely on this.
• Clear terms upfront. Banks must share the MITC, with all fees and interest rates, before you accept a card.
• A way to complain. If you think a charge is wrong, raise it with your bank first. If the bank doesn’t reply within 30 days, or you’re not happy with the reply, you can file a complaint on RBI’s complaint management portal.

FAQs: Credit Card Charges

What are the main credit card charges in India?

The main charges are the annual fee, interest on unpaid bills, late payment fees, cash withdrawal fees, forex markup, over-limit fees, EMI processing fees, reward redemption fees, and 18% GST on most of these.

How much is the late payment fee on an SBI credit card?

It depends on the amount due. SBI Card charges nil up to ₹100, ₹100 for ₹101 to ₹500, ₹500 for ₹501 to ₹1,000, and ₹1,300 for above ₹50,000, with slabs in between. GST is added on top.

Is GST charged on credit card interest?

Yes. 18% GST is charged on credit card interest, as well as on the annual fee, late fee, and most other charges.

What are the charges for withdrawing cash from a credit card?

SBI Card charges 2.5% of the amount or ₹500, whichever is higher. Interest also starts from the day you withdraw, and GST is added to both.

What happens if I pay only the minimum amount due?

You avoid the late fee, but interest keeps running on the rest of the balance, with GST added. Paying only the minimum can stretch a small balance into years of repayment.

Can a bank charge an over-limit fee without my consent?

No. Under RBI rules, a bank needs your clear consent before it lets you spend above your limit or charges an over-limit fee.

Are there charges on online payments with a credit card?

Normal online shopping in India usually has no extra charge. But some payments do, like rent, wallet loads, and education fees through third-party apps. Payments in foreign currency carry a forex markup.

Are credit card charges the same at every bank?

No. Every bank sets its own fees, and they can differ even between two cards from the same bank. Check your own card’s MITC for the exact numbers.

Conclusion

Most credit card charges come from three habits: paying late, paying only part of the bill, and taking cash on the card. Avoid those three and most of the costs in this article won’t apply to you. What’s left is mainly the annual fee, forex markup on foreign spends, and GST.

Keep your card’s MITC handy, check your statement each month, and question any charge you don’t understand.

Disclaimer: This article is for general information and education only. It is not financial advice. FinServ Decode is not a bank or card issuer and does not decide card fees, interest rates, or approvals.

The SBI Card charges mentioned here were checked as of now from SBI Card’s official notices and documents. Banks can change fees at any time. Before making any decision, check the latest Most Important Terms and Conditions (MITC) and fee schedule on your bank’s official website. The examples in this article are simple illustrations based on stated assumptions, and your actual charges will depend on your card, your dates, and how you pay.