Hidden Costs to Watch Out for in LTF Credit Cards

Lifetime free credit cards often promise zero annual fees, but that doesn’t mean they’re entirely free of charges. Understanding these hidden costs is crucial for making informed decisions.

Common Hidden Costs in LTF Credit Cards

1. Late Payment Fees

• What It Is: A penalty for missing the due date.
• Cost: ?100 to ?1,000 based on outstanding balance.

2. Cash Advance Fees

• What It Is: Fees for withdrawing cash from ATMs using your credit card.
• Cost: 2.5%-3% of the withdrawal amount.

3. Foreign Transaction Charges

• What It Is: Fees for transactions made in foreign currencies.
• Cost: Typically 3%-5% of the transaction value.

4. Over-Limit Fees

• What It Is: Charges for exceeding your approved credit limit.
• Cost: ?500 or 2.5% of the over-limit amount.

5. Reward Redemption Fees

• What It Is: Processing fees for redeeming reward points.
• Cost: ?99 to ?500 depending on the redemption.

Learn how to mitigate these charges by reading Are Lifetime Free Credit Cards Really Free?.

Tips to Avoid Hidden Costs

1. Pay Full Balances on Time:
   Avoid interest and late fees by clearing dues before the due date.
2. Limit Cash Withdrawals:
   Use your credit card for purchases, not cash advances.
3. Stay Within Your Credit Limit:
   Monitor spending to prevent over-limit fees.
4. Check Terms Regularly:
   Periodically review your card’s terms for updates on fees.

Conclusion

While lifetime free credit cards save you from annual fees, hidden charges can still add up. Being aware of these costs helps you use the card more effectively.

For an overview of LTF credit cards, visit Best Lifetime Free Credit Cards in India.

FAQs

1. Are lifetime free credit cards completely free of charges?
   No, while lifetime free credit cards don’t have annual fees, they may include other charges such as late payment fees, cash advance fees, and foreign transaction charges.

2. What is a cash advance fee on lifetime free credit cards?
   A cash advance fee is charged when you withdraw cash using your credit card, typically ranging from 2.5% to 3% of the withdrawal amount.

3. How can I avoid late payment fees on my LTF credit card?
   Ensure timely payment of your credit card dues in full to avoid late payment penalties.

4. What are foreign transaction charges on LTF credit cards?
   These are fees charged for transactions made in foreign currencies, usually between 3% and 5% of the transaction value.

5. Do I have to pay to redeem reward points on my lifetime free credit card?
   Some credit cards may charge a reward redemption fee, typically ranging from ?99 to ?500, depending on the redemption value.

6. How can I minimize hidden costs on lifetime free credit cards?
   Pay full balances on time, avoid cash advances, stay within your credit limit, and review your card’s terms regularly to stay informed about any fee changes.

7. Do all lifetime free credit cards have hidden charges?
   Most LTF credit cards include some form of fees for specific actions, but their terms vary by issuer. Always check the card’s terms and conditions before applying.