Credit Card Costs You Need to Know, Not Just Interest!

In the first month of credit card usage, everything is still according to Budi’s estimate. But, in the fourth month, the credit card bill Budi received was greater than his calculation. There are various additional credit card fees that appear on the transaction list so that the bills swell.

No, Budi is not being cheated. He just did not know, that behind all the conveniences and “bonuses” given by credit cards, there is a price to be paid by credit cardholders.

Not only are the rates of transactions relatively high, but there are also various kinds of credit card fees that must be borne by credit cardholders. Moreover, if the customer does not know and does not take into account the risk of these additional costs.

Annual fee

Annual fee

Annual fee ( annual fee ) is a fee that must be paid by credit card holders as compensation for services and facilities provided by the card issuer.

The amount depends on each credit card issuer and card type. The more complete the card features and the more premium the card type, the higher the annual fees charged.

Some banks charge annual fees on the customer’s first bill, but there are also banks that charge annual fees after one year of credit card use.

Annual fees are often the consideration of prospective customers in choosing a credit card, therefore many card issuers offer promising annual fees for free for a certain period.

But, don’t forget to pay attention to the terms and conditions. Not a few promos of annual fee-free credit cards that have certain conditions. For example, customers must reach a certain minimum transaction from the given limit. Do not let the pursuit of free annual fees, instead, you become using a credit card more than necessary.

Late fees

Don’t think it’s trivial to delay paying credit card bills. Because there are late fees or penalties that can add to the burden of the bill.

Credit card issuers usually charge a late fee of about 3 percent of the total bill or the maximum value specified by the credit card issuer.

To avoid late payment, if you have a savings account at the same bank as the credit card issuing bank, take advantage of the auto-debit feature, aka automatic fund withdrawals for bill payments. In addition, make sure to use the bill sending feature using e-mail.

Interest costs


The interest fee is charged by each customer using a credit card to buy goods with an installment system. Generally, credit card interest ranges from 0 percent to 2.25 percent per month.

For example, you buy a cellphone for USD. 10 million with a three-month installment program and an interest of 2.25 percent. So, every month, you have to pay an extra USD 225 thousand every month.

However, at this time, not a few zero percent installment facilities offered by credit card issuers, so that the total installments paid will be the same amount as the original price or paid in cash. Even so, pay attention to the additional costs that accompany, such as administrative fees or other costs.

If you pay a credit card bill with a minimum payment, the rest of the following month’s bills will also be charged interest fees. Therefore, you should always pay the full bill before the due date.

Over limit charges ( over limit )

When the credit card application is accepted, you will get information on the nominal limit of shopping transactions and nominal cash withdrawal transactions that can be done. Well, if the usage exceeds the specified card limit, credit cardholders will be charged an over-limit fee.

The average over-limit fee starts from USD 40 thousand to over USD 150 thousand. However, there are also bank issuers who waive over-limit fees.

Cash withdrawal fee

Cash withdrawal fee

Like a debit card, credit cards can also be used for cash withdrawals. For example, if you have a credit card with a limit of USD 20 million and a cash withdrawal limit of USD 10 million. When experiencing urgent conditions, you can make cash withdrawals at ATM machines like a regular debit card.

But don’t forget that money withdrawn from credit cards is not our money, aka loans. Therefore, there is interest and costs to be paid. Generally, credit card cash withdrawals are charged at a rate of around 4-6 percent of the total funds withdrawn.

For example, if you withdraw a credit card of USD. 2 million with a cash withdrawal rate of 6 percent, the fee to pay in USD. 120 thousand. If the bill is not paid immediately before maturity, get ready to bear interest so that the bill gets bigger in the following month.