Late fees on the leading credit cards from SBI, HDFC, ICICI, Axis

Late fee is the penalty charged for non-payment of minimum payment on your credit card bills on time. It differs according to the amount outstanding in a particular month. The late fee is charged on your subsequent billing cycle.

For example, your credit card bill payment falls on the 5th of every month. You paid your October month credit card bill of Rs 5,000 on November 15th. You will be charged a late fee of Rs 500 on the November month credit card statement.

Synopsis Of Late Fees Charged By The Leading Credit Card Issuers

HDFC Bank and ICICI Bank Credit Card

Amount OutstandingHDFC Credit CardICICI Credit Card
Less than Rs 100NILNIL
Rs 101 to Rs 500Rs 100Rs 100
Rs 501 to Rs 5,000Rs 500Rs 500
Rs 5,001 to Rs 10,000Rs 600Rs 750
Rs 10,001 to Rs 25,000Rs 800Rs 900
Rs 25,001 to Rs 50,000Rs 1,100Rs 1,000
Greater than Rs 50,000Rs 1,300Rs 1,200

SBI Credit Card

Amount OutstandingSBI Credit Card
Less than Rs 500NIL
Rs 501 to Rs 1,000Rs 400
Rs 1,001 to Rs 10,000Rs 750
Rs 10,001 to Rs 25,000Rs 950
Rs 25,001 to Rs 50,000Rs 1,100
Greater than Rs 50,000Rs 1,300

Axis Bank Credit Card

Amount OutstandingAxis Bank Credit Card
Less than Rs 300NIL
Rs 301 to Rs 500Rs 100
Rs 501 to Rs 10,000Rs 500
Rs 10,001 to Rs 25,000Rs 750
Greater than Rs 25,000Rs 1,000

You can see from the above representation that HDFC and ICICI follow the same slab rates for charging late fees. However, ICICI charges higher than HDFC for the amount outstanding up to Rs 25,000. When the amount outstanding is greater than Rs 25,000, the late fees charged by HDFC are higher.

State Bank of India is also on par with the late fees charged by HDFC and ICICI. But SBI charges late fees only if the amount outstanding is more than Rs 500, whereas HDFC and ICICI slab rate starts from Rs 101 and Axis Rs 301.

Also, the late fee slab rates of the State Bank of India are wide compared to HDFC, ICICI, and Axis. For example, late fees charged from Rs 10,001 up to Rs 25,000 is Rs 750.

Why Is A Late Fee Charged?

A late fee is charged to discourage the late payment of the Minimum Amount Due (MAD) on your credit cards. The late fee is in addition to the interest charged on the balance outstanding.

A grace period of 3 days is generally allowed for charging applicable Annualized Percentage Rate (APR) and late fees on your credit card.

How Should You Avoid Late Fees?

  • Make it a financial discipline to pay all your credit card bills on time.
  • Make a note of your date of credit card statement generation and keep a 3 days advance reminder.
  • Keep your bank account sufficiently funded to pay your credit card bills on the due date.
  • If you are paying your credit card bills through cheque, ensure you do not overwrite which makes the cheque invalid. Keep your bank account funded and withdraw only after the cheque is cleared for the credit card payment.
  • Ensure you do not make any high-value transactions using your credit card near the statement generation date. This will help in avoiding undue financial stress.
  • If you foresee that you will not be able to pay your credit card bill on the due date, try to make it before the end of the grace period. If you feel that you will not be able to do it even then, you can talk with your lender to offer an extended grace period. The credit card provider may give the same considering your past credit history and relationship. But this practice is generally discouraged to inculcate good repayment discipline.

Why Should You Avoid Late Fees?

A late fee is a penalty charged for not paying your credit card on time. This will add up to your outstanding liability apart from the interest charges. If you continue to use your credit card without clearing the outstanding, it increases the interest and also the amount of late fees charged since you go to the higher slabs of outstanding. Also, late payment fees harm your credit score. This can lead to a reduction in your credit limit and may not go well with other lenders. Any consistent defaults for more than 3 months, can lead to deactivation and blockage of your credit card. If the default is more than 6 months, your account will be classified as a defaulter.

What should you do if a late fee is charged?

If you pay your credit card bill within a reasonable period after the due date, you can speak with your credit card provider for a waiver of late fees.

The lender may consider waiving the late fees once or twice a year but not more than that. Else, you should repay the outstanding bill that includes interest and late fees.

Credit cards are instruments of convenience since they offer instant funding and exciting offers and benefits. You can get a variety of offers, rewards, and cash back on your travel, communication, entertainment, dining, utility bills, and gadget spending.

Credit cards can be a great tool for payment if used wisely. It is very important to clear your credit card bills on time to avoid unnecessary penalties, interests, and charges. This significantly adds up to your financial burden and causes stress.

If you have multiple credit cards, ensure to keep track of the due date of payment for all the cards and clear without missing any. Penalties and fees can be frustrating financially and mentally. Hence follow a disciplined approach to pay the credit card bills on the due date to have a trouble-free experience.

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