Credit card charges are eating into the customers hard earned money . They are referred to as finance charges, transaction charges or interest charges. You may end up paying as high as 60% if you do not manage your credit card payments well.

Always note the due date for payment of credit card dues. If you are using internet banking facility ,you can do well to pay online on the due date.

Though you have the freedom to pay as little as 5% of the total dues , my suggestion is do not go for this facility. It will only earn whopping income for credit card agencies. You may not be aware of the following charges.

1.You will be charged finance charges ranging from 2.5 to 3.5% per annum not from the due date of payment but from the date of transacation. There is no logic in it since credit card agencies earn some commission from merchant establishments which takes care of interest till the due date. In spite of this credit card agencies charge interest from the date of transactoin even if you carry over a small portion of the total bill.

2.All your fresh purchases will attract finance charges from the date of transaction till such time you clear the total payment dues.

So the biggest beneficiary of paying less than whatever is due is the issuing agency and not the customer. RBI has given free hand to banks to charge any rate on credit card agency. The master circular of RBI on Credit card business says that finance charges are to be charged from the due date wheereas the standard printed agreement of all the banks entitle them to charge from the date of transaction thereby taxing the honest payers.

So I would suggest all credit card holders to pay the bills in full. It is advisable to go for personal loan rather than availing credit limt of credit card.