Additional Charges By Banks

Many lenders charge an additional fee for issuing numerous cheques and swiping the credit card. Here’s a list of the additional charges by banks levy, which goes unseen. Here are some examples of additional charges by banks you should know:

• Using Too Many Cheques

Are you using cheques to pay all your expenditure from rent to electricity? You must know that banks set a limit on the no. of cheque leaves issued in a year. If you go beyond the limit, you have to pay additional charges levied by banks with extra charges. The charges that are levied could be altered according to the RBI. In order to promote electronic payment, RBI intends to make changes in order to remove the cheque usage NEFT is an online payment facility that eliminates these extra additional charges by banks.

• Paying Cash For Credit Cards

When the last day to clear the Credit Card dues arrives, many of us end up paying by cash for immediate compensation to avoid delayed fees. In doing so, you are drawing a charge levied by the additional charges by banks on cash payment, though the logic is unclear.

For example, HDFC Bank specifies that payment of credit card bills in cash will involve additional charges by banks Rs.100 charge toward processing costs. So, cut off your cheques well in advance, or utilize an instant payment facility to conclude the transaction immediately.

• Exceeding the credit limit

When you go beyond the credit limit unknowingly, you have to pay an overdrawn fee. The fee imposed is a percentage of the overdrawn amount, in accordance with the maximum and minimum limit.

Private Bank customs a 2.5 percent fee, liable to a maximum of Rs 500. This kind of position can occur quite easily if you’re on a foreign vacation. Banks like HDFC impose an additional 10 percent fee on all transactions conducted in foreign currency, making it difficult to keep an accurate check on whether you’re within your spending limits. So, the only way out is to be cautious about the card usage limit.

• Transferring balance

The idea of Transferring the Existing Balance to another card might seem a good idea for a while, but this might land you to pay a high sum. Carefully read the fine print before switching to a card-carrying lower interest.  Often, in order to lure the customer banks lower the interest but a large fee might be charged. This sum may turn out to be even more than the interest you would have paid initially.

• Not using your account

Banks might penalize you for not using the account for quite a while. This penalty is known as a non-operative penalty. Setting up a bank account just to put away funds for the rainy day sounds like a good idea, except you could be penalized for not operating it. The duration of time before an account is reported dormant varies across banks.

• Service alerts

There are many unseen but unavoidable charges that you have to pay. One such fee which lenders charge for sending you alerts via SMS or e-mail every time a transaction is made. Such a facility is availed for security purposes, and you must consider them as important but unavoidable fees which are additional charges by banks. Some banks provide this facility free of charge to their customers such as CitiBank.

Similarly, online payment through NEFT and RTGS also imparts small additional charges by banks that can’t be avoided.

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