Everyone with a credit card needs to know about this important update. As of May 2025, the RBI and several banks plan to make major adjustments to credit card charges. As a result of these rules, consumers can expect to see updates in late payment fees, annual costs, transaction costs abroad and cash advance payments. If you regularly use credit cards, the details shared here will benefit you greatly. We should examine the changes and their impact on your finances.
Penalty Will Increase On Late Payment
As of May 2025, a larger fine will be placed on those who forget to pay their credit card bills on time. You may be required to pay a late fee ranging from Rs 500 to Rs 750 each month at most banks. On some luxury cards, the annual fee may go higher. If you make your payments late more than twice in a row, it can hurt your credit score.
Annual Fee Will Increase
The annual fee for credit cards has been raised by 10-20% by many banks. The amount you may be charged for a basic credit card increases to Rs 500 to Rs 1,000, while it could go up to Rs 2,500 to Rs 5,000 for a premium card. Some banks have chosen to remove the fee when customers meet the minimum spending requirement.
Additional Charges On Foreign Transactions
New policies affect the way banks process international credit card requests. Effective May 2025, an extra fee of either 3.5% or 4% will be added to all transactions involving money sent or received in a foreign currency. Apart from the base amount, there can be additional fees for using Dynamic Currency Conversion service. People who plan international travel should know about these fees ahead of time.
Charges On Cash Advance Will Increase
Withdrawing cash using a credit card now involves higher costs. Under the new system, there will be a cash advance fee of 3% to 5%, with a minimum cost of Rs 300. Additionally, the interest charged on cash advance is now 3.5% per month. You should reserve this method of transportation for needs that are urgent.
Reduction In The Value Of Reward Points
Banks have also updated their credit card reward plans. You now earn fewer points for every Rs 100 you spend. The rate of air miles or cashback on some cards is lower than before. If you care about reward points from your credit card, check the new terms thoroughly.
Conclusion
Noticing these new rules will prevent you from facing unexpected charges. Taking care of your bills promptly, setting up autopay and using special cards for foreign spending can help you a lot. Contact your bank to find out the details of the new fees and face these changes by planning your finances properly.
Also Read: PPF Withdrawal Process Revised! Here’s What Account Holders Should Know