Late Payment Charges on Credit Cards

*T&C Apply

The fees may vary between different card variants. Refer to the card’s terms to determine the applicable fee.

Tips to Avoid Late Payment Fees

Set up an auto-debit, note your due date and pay before it arrives. Each of these habits lowers the chance of a missed payment.

1. Turn on auto-debit for at least the minimum due. Once your mandate is registered and active, the bank can debit the payment from your linked account on the due date. The debit goes through only if the account has enough funds, so SBI Card advises keeping the money there a day ahead. If an auto-debit fails, SBI Card may put the mandate on hold, and you would need to pay that month's dues another way. 
2. Write down your due date somewhere you'll see it. Bank reminders can get buried in a busy inbox. A phone calendar alert gives you a second nudge.
3. Pay a few days early. Some payment modes take time to reach the card account. SBI Card, for example, asks cardholders with an active auto-debit to make any other payment three days before the due date.
4. Know your grace period, but don't plan around it. SBI Card allows 3 extra days after the due date if earlier dues are clear. It's a safety net, not a second deadline.
5. Pay more than the minimum when you can. Every rupee above the minimum shrinks the balance that attracts interest next month.
6. Ask customer care about a waiver if you slip once. Some banks may reverse a first late fee for customers with a good repayment record. It's entirely the bank's call, but asking costs nothing.

It is when you juggle due dates for three to four cards that most individuals tend to falter. Sounds like you? A consolidation loan might help make your repayments simpler to manage. You can view several consolidation loan offers on LoansJagat.

What Happens If You Don’t Pay?

Let us take an example of a credit card user who owes an amount of ₹30,000 and misses his payment by one week from the due date. For instance, if we consider the scenario of SBI Cards, as per MITC, late charges for an overdue amount above ₹25,000 and below ₹50,000 would be ₹1,100. Tax levied on this would be 18% of ₹1,100, which amounts to ₹198. The total comes out to be ₹1,298. This is without the interest charges. Moreover, since it is beyond 3 days, he is liable to pay the late fee.

Conclusion

Late payment fees on Indian credit cards can add up faster than many cardholders expect. The reason behind this is that there is the flat slab-based fee, which comes along with GST, and then there is the interest that gets accumulated on a retrospective basis since the date of the original purchase and not the missed due date. In light of the fact that both HDFC Bank and ICICI Bank have stated this fact on their website, it becomes imperative to have an auto-payment system for paying at least the minimum due before the deadline.

FAQs

What are late payment charges on a credit card?

Late payment charges are a fee that a card issuer levies when the minimum amount due is not paid by the due date. The fee usually depends on your outstanding balance. At SBI Card, it ranges from nil for dues up to ₹100 to ₹1,300 for dues above ₹50,000, plus GST. 

How is interest different from a late payment fee?

A late payment fee is a flat charge that applies when the minimum amount due is not paid by the due date. If you pay less than the full bill, interest may be charged on the unpaid amount, even when the minimum due is paid. How the interest is calculated depends on your card issuer's terms. At ICICI Bank, interest can go up to 3.75% a month, and the same page explains how ICICI Bank works it out. Check your own card's MITC for its rate and calculation method. 

Do I get charged a late fee if I pay only the minimum amount due?

No, paying at least your minimum amount due by the due date generally avoids the late payment fee, though interest may still apply on any unpaid balance.

Is there a grace period for credit card payments?

Many banks allow a short grace window, commonly around 3 days, though relying on this isn't a substitute for paying by your actual due date.

Does a missed credit card payment affect my CIBIL score?

A missed credit card payment may affect your CIBIL score if the bank reports it to credit bureaus. When this happens depends on the card issuer. HDFC Bank, for example, reports a card account as past due to credit bureaus once it stays unpaid for more than 3 days after the due date. 

Can a late payment fee be waived?

Sometimes, many banks offer a one-time waiver for customers with a genuinely clean repayment history, though this typically requires directly contacting customer care.

Why does interest apply from my purchase date instead of my missed due date?

Many card issuers give an interest-free period only when the full bill is paid by the due date. If you pay less than the full amount, some banks charge interest from each purchase date instead. SBI Card, for example, charges finance charges from the date of transaction when the balance is not paid in full. The exact method can differ between banks and cards, so check your card's MITC. 

Do premium credit cards charge lower late payment fees?

Some premium card variants carry exemptions or reduced fee structures, though most standard cards follow their issuing bank's regular slab structure.

How much GST applies on top of a late payment fee?

18% GST typically applies on the late payment fee amount, in addition to the base fee itself.

What is the best way to avoid credit card late payment charges?

Setting up autopay for at least your minimum amount due, and paying a few days before your actual due date, genuinely reduces your risk of missing a payment.