After into such a debt-full situation I finally decided that it is time to get acquainted with my credit card in a better manner.I have a Citibank-Indian Oil credit card (Mastercard) that I am using it for the past 10 months. Below are the features and charges for my CC.

Exclusive Features:

1 Reward point for every Rs 200 spent on the card
3 Reward points for every Rs 200 spent on gasoline at Indial Oil (IOC) outlets
No transaction fees applicable for buying fuel at IOC outlets.

Each reward point is equivalent to Re. 1 and can be redeemed for fuel, lubricants at IOC outlets.

If I reflect back and see my CC usage I have never been late in payment and most of the times I have paid in full. I was happy till today as I came to know of the hidden charges that I have paid already without knowing them.

I have used my card once for air travel and many times for rail travel, I have made three international transactions, paying for GRE and TOEFL entrance exam fee for my brother and paying for web hosting. I now realize I have paid huge transaction charges without even knowing them.

Till date (Ten months period) the total amount that I have spent on my card is Rs. 85,243.48 this includes the interest charges, transaction fee and service tax. The total charges I have paid on my card is Rs.4721.32 which is around 5.9% of my total spending and nearly 20.78% of my one month’s salary. The points that I have earned on the card are a measly 640 which are equivalent to Rs 640.

So despite making full payments all the year (missed once or twice) I paid such a sum as charges.

The learning from this analysis:

I do not have to make any international transactions on my card, no balance transfer, no railway/air ticket booking as all this eats up my money in the form of transaction charges. I should use the card for fuel purchase as it will fetch me points and no transaction charges. One advantage that I can see from my card is that it enabled me for this analysis and I could analyze my spending pattern over these months through the monthly statements that I received.

Regular Benefits:

Access the CC statement through Internet
Statement through e-mail
Mini-statements on mobile
Electronic clearing facility for bill payment
Special insurance package
Overseas mediclaim plan
Balance Transfer
Conversion to EMI
A loan on CC
Interest free cash for 30 days

Fees and Charges:

Cash advance fee: 2.5% subject to a minimum of Rs. 250
Statement Request: Rs 100
Outstation Cheque: Rs 100
Interest rate: 37.2% to 42% p.a.
Late payment charges: Rs 300-700
Railway/air ticket transaction fee: 2.5% subject to a minimum of Rs 25
Card replacement charge: Rs 100
Foreign currency transaction: 3% (including the service tax)

Deciphering the charges
I get interest free cash but a cash advance fee of 2.5% works out to be 30% interest p.a.
Similarly a 2.5% railway or air ticket transaction is 30% p.a. interest payment.
Late payment charges include service tax of 12.36%.